Wall Street follows global market losses on the third day as Trump remains committed to tariffs
Wall Street has sunk again as other global markets decline, fears whether the trade war between U.S. President Donald Trump will catch the global economy.
The S&P 500 fell 3.8% early on Monday, its worst week since Covid began to collapse in March 2020. The Dow Jones industrial average fell 1,200 points, and the Nasdaq composite rate fell 4%.
The S&P/TSX composite index opened up nearly 4%.
Before trading begins, the S&P 500 is heading towards bear territory – defined as being more than 20% away from the peak. The S&P 500, Nasdaq and Dow Jones all re-established some value before the market opened. As of last weekend, the index's revenue was 17.4%.
Trump announced a sharp drop in U.S. import taxes and retaliation on Thursday and Friday, with riskier assets selling higher at the start of the trading week.
Later on Sunday, Trump reiterated his determination, saying: “Sometimes you have to take medication to solve some problems.”
Some of these countries, including South Korea and Pakistan, said they will soon send trade officials to Washington for clarity.
However, German Economy Minister Robert Habeck expressed resistance when he attended the EU Trade Minister's meeting in Luxembourg, saying the premise of widespread tariffs was “nonsense” and that the attempts of countries to win exemptions had not worked in the past.
He said it is important for the EU to unite. “It means clear that we are in a strong position – the United States is in a weak position.”
Trump has made the tariff defense a solution to the U.S. trade deficit – which most economists believe is not a sign of economic health in itself. As far as Canada and Mexico are concerned, he is trying to use tariffs to try to curb the flow of fentanyl into the United States, even if the drug fixation of Canada entering the United States is relatively low.
JPMorgan Chase CEO Jamie Dimon, in his annual notes to shareholders earlier Monday, warned investors that unrest caused by U.S. tariffs and the global trade war could slow growth in the world’s largest economy, which stimulates inflation and could lead to lasting negative consequences.
“The faster this problem is solved, because some of the negative effects will accumulate and increase over time and are difficult to reverse,” the CEO wrote.
U.S. President Donald Trump once again defended his tariff agenda and dismissed his claim that he deliberately damaged financial markets to force the Fed to lower interest rates.
JPMorgan Chase economists have increased the risk of this year's U.S. and global recession by 60% from 40% as Trump uncovered the steepest trade barriers in more than 100 years last week.
Dimon said in January that the tariffs criticizing Trump need to be “surmounted”, although he did allow them to implement them carefully.
The U.S. Federal Reserve can reduce the impact of tariffs on the U.S. economy by lowering interest rates. This can encourage corporate and households to borrow and spend. But Fed Chairman Jerome Powell said Friday that higher tariffs could raise expectations of inflation, while lower interest rates could increase price gains.
U.S. listed stocks of cryptocurrency companies also stumbled before the market opened on Monday. Bitcoin fell as much as 5.5% on Monday, reaching its lowest level in 2025, with the final transaction price being 2.1% lower.
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On Friday, the worst market crisis turned into higher gears since the 19-year-old pandemic, as the S&P 500 fell 6% and the Dow fell 5.5%. Nasdaq Composite fell 3.8%.
“There is no sign that the market is finding the bottom and starting to stabilize,” Deutsche Bank analysts wrote in a research note.
Global markets fall
The Chinese markets usually don’t follow global trends, but they also fall. Hong Kong's Hunton fell 13.2%, while Shanghai's comprehensive index lost 7.3%. In Taiwan, Taiex plummeted 9.7%, while South Korea's Kospi lost 5.6%.
Beijing caught the attention of confidence even when markets in Hong Kong and Shanghai fell on Monday. On People's Day, the Communist Party's official cigarette holder has strong words.
“The sky won't fall,” it declared, adding: “Faced with the indistinguishable fist of American taxes, we know what we are doing and we can use tools.”
Shortly after the market opened, Tokyo's Nikkei 225 index lost nearly 8%, while benchmark futures trading was temporarily suspended. It closed 7.8%.
European stocks followed the Asian market, led by Germany's DAX index, which briefly fell more than 10% in the open at Frankfurt Exchange, but recovered a certain ground in midday trading, down 4.8%.
In Paris, the CAC 40 was down 5.1%, while the UK's FTSE 100 lost 4.9%.
Oil prices plummet
For the first time since 2021, a barrel of benchmark U.S. crude oil fell below $60. The benchmark Brent crude fell nearly 15% in the last five days of trading, and a barrel of oil costs just over $63. It's down nearly 30% from a year ago.
Middle Eastern stock markets stumbled on Monday as they struggled with the double blow of new U.S. tariffs and oil prices plummeted.
The cost per barrel is much lower than the breakeven price of Saudi Arabia and most other countries that produce energy in the Middle East. This is combined with new tariffs, with tariffs in the Gulf Cooperation Commission states Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates reaching 10%.
“Through these measures and the expected retaliation measures other countries can take, the stability and predictability of international trade may be undermined,” the accounting firm PWC said in an consultation with clients in the Middle East.
