European shares look set to open deep in the red on Monday as global markets go through heightened volatility caused by extreme uncertainty over how U.S. President Donald Trump’s tariffs will evolve.
The European Union is likely to join Canada and China against Trump’s tariffs. “We will react in areas where it hurts the United States,” a senior EU official said.
As per Reuters, countries like Japan, Mexico, South Korea, and India are seeking concessions from the U.S. rather than retaliating.
Others like Vietnam and Cambodia are negotiating lower tariffs or asking for delays.
Britain is still hopeful that any tariffs imposed by Trump will be reversed shortly, if the two sides can agree the outline of a new economic partnership.
Futures linked to Wall Street’s indexes have tanked on Sunday evening as Trump’s top economic officials dismissed investors’ fears of inflation and recession even after a two-day historic stock market rout.
Trump on Sunday said that sometimes you have to take medicine when asked about falling markets, adding that the U.S. was treated so badly by other countries.
U.S. Commerce Secretary Howard Lutnick told CBS News that the tariffs will stay in place for days and weeks.
Treasury Secretary Scott Bessent downplayed the stock market drop and noted to NBC News that more than 50 countries have approached the administration for negotiations.
Asian markets slumped, with benchmark indexes in Australia, New Zealand, South Korea, China, Hong Kong and Japan falling 4-11 percent as traders keenly watch the latest developments on the tariff front.
Investors also await U.S. reports on consumer and producer price inflation and consumer sentiment and inflation expectations this week for fresh clues on how the Federal Reserve will adjust interest rates in 2025.
Amid global trade tensions, investors piled into safe haven assets such as bonds, the Swiss franc and the Japanese yen.
A rally in U.S. government debt sent the U.S. two-year yield to touch the lowest since 2022.
Copper fell more than percent and gold plunged to a 3-1/2-week low below $3,050 per ounce, while oil extended last week’s steep losses to hit a four-year low as Saudi Arabia slashed its flagship crude price by the most in more than two years.
U.S. stock market turmoil deepened on Friday as China hit back at tariffs announced by President Trump, raising the likelihood of an extended trade war that could cut into corporate profits and stall economic growth.
Federal Reserve Chair Jerome Powell said in remarks at a business journalist conference that it is becoming clear that the tariff increases will be significantly larger than expected and the same is likely to be true of the economic effects, which will include higher inflation and slower growth.
He, however indicated the central bank will wait for greater clarity before considering any adjustments to interest rates.
The S&P 500 plummeted 6 percent, capping the worst week for the U.S. stock market since the early days of the Covid pandemic in March 2020 and reaching an 11-month closing low.
The tech-heavy Nasdaq Composite plunged 5.8 percent to enter a bear market. The Dow tumbled 5.5 percent, putting its two-day decline at nearly 4,000 points.
European stocks plunged to fresh multi-month lows on Friday as China announced 34 percent tariffs on all U.S. imports in reaction to Trump’s new levies and also unveiled other measures to restrict U.S. trade.
The pan European STOXX 600 slumped 5.1 percent and confirmed correction territory.
The FTSE 100 plunged almost 5 percent, marking its steepest fall in five years. The German DAX lost 5 percent and France’s CAC 40 shed 4.3 percent.
Market Analysis
European Shares Likely To Extend Losses As Recession Fears Grow
2025-04-07 05:47:39
