Global Stocks Struggle as Tariff Fears and Economic Slowdown Weigh on Markets

Global stocks took a hit as traders reacted to increasing concerns over President Donald Trump’s impending tariff announcement, which has escalated fears of a broader trade war. The global selloff saw equities in major financial hubs such as New York, London, and Tokyo suffer losses as investors moved to safer assets, such as bonds and gold. U.S. stocks are on track for their worst quarterly performance relative to global markets since the 1980s, with tech stocks, previously fueled by AI optimism, also taking a significant hit.

U.S. stock indexes opened lower on Monday, and investors were seen backing away from riskier assets amid growing fears that the tariff plans could push the economy into recession. This resulted in a rare occurrence where bonds outperformed equities over a three-month period, a trend not seen since the early stages of the pandemic in March 2020. Meanwhile, the U.S. dollar, traditionally a safe-haven asset, has not acted as expected, falling against most major currencies.

President Trump confirmed that he plans to announce extensive tariffs on all countries starting April 2, dampening any hopes that the measures would be limited in scope. This has led to uncertainty in the markets, with traders and analysts, such as Chris Larkin from E*Trade, noting that how rigid the tariffs are could significantly impact near-term market trends. Meanwhile, gold prices surged to a record high, topping $3,100, as investors flocked to the precious metal for security.

As market volatility increased, analysts like David Kostin from Goldman Sachs downgraded their outlook for the S&P 500, now forecasting a year-end target of 5,700, down from 6,200. This reflects heightened recession risks and the uncertainty surrounding the tariff situation. Kostin suggested that further deterioration in growth and investor confidence could lead to even more significant declines in valuations, advising investors to wait for signs of market stabilization before considering buying in.

Source: Business day