Global Markets Plunge as Trump’s Tariffs Spark Economic Fears

Global stock markets tumbled sharply, and the U.S. dollar hit a six-month low after President Donald Trump announced a sweeping set of tariffs on U.S. trade partners. The move, which has rattled investors worldwide, is expected to disrupt supply chains and deepen concerns about an economic downturn.

Markets across Europe and Asia saw heavy losses on Thursday, with London’s FTSE 100 dropping 1.5%, Germany’s Dax sliding 2.3%, and France’s CAC shedding 2.5%. The sell-off followed a steep decline in Asia, where Japan’s Nikkei and Topix fell 3.3% and 3.5%, respectively, after facing a 24% tariff on exports to the U.S. Hong Kong’s Hang Seng dropped 1.9%, while Vietnam’s stock market—hit with 46% tariffs—plunged 6.7%.

U.S. futures point to major Wall Street losses

U.S. stock futures also signaled a rough opening for Wall Street. Dow futures were down 2.7%, while S&P 500 futures dropped 3.4%. The Nasdaq, which includes many companies with exposure to China, was hit hardest, with futures falling 3.8%.

Several major American companies took heavy pre-market losses. Apple, which relies on Chinese manufacturing, saw its shares plunge 7%. Nike fell 7.3%, AI chipmaker Nvidia dropped 5.6%, and Tesla slid more than 8%.

Dollar weakens as investors seek safety

The U.S. dollar tumbled nearly 2% against a basket of global currencies, hitting its lowest level in six months. The British pound surged to $1.3148, while Deutsche Bank warned clients in a note to “beware a dollar confidence crisis.”

At the same time, fears of a global recession sent investors rushing to safe-haven assets. Gold prices soared to $3,167.50 overnight as traders sought refuge from market turmoil.

Rate cuts now seen as likely

With markets in freefall, investors are betting that central banks will step in to stabilize the economy. Money markets are now pricing in a 92% chance that the European Central Bank will cut interest rates later this month, up from 80% just a day earlier. Expectations for a Bank of England rate cut in May have also increased to 77%.

Oil prices sink on recession fears

The global economic uncertainty also weighed on oil prices, with Brent crude dropping 5.8% to $70.61 per barrel. Analysts fear that the tariffs could push the world into a recession, leading to weaker demand for energy.

With trade tensions escalating and markets reacting negatively, investors and policymakers will be closely watching the next steps from the White House and global leaders.