Stock markets fell on Monday due to fears regarding President Trump’s trade policies affecting the economies of the US and China. Wall Street indices opened lower, with the Nasdaq down two percent amidst recession fears. European markets were also impacted by political uncertainties in Germany and Chinese economic data indicating deflation. Overall, investor sentiment remains wary amid these economic challenges.
On Monday, stock markets declined as investors expressed concerns about President Donald Trump’s trade policy affecting economic growth in the United States and China, which are the world’s two largest economies. Wall Street’s primary indexes opened lower, with the tech-oriented Nasdaq dropping by approximately two percent after President Trump indicated that the risk of a US recession could not be dismissed.
In an interview with Fox News, President Trump remarked, “I hate to predict things like that,” when questioned about a potential recession in 2025, acknowledging a transitional phase as efforts were made to “bring wealth back to America.” This uncertainty caused turmoil within US financial markets, as tariff threats against Canada, Mexico, China, and others made consumers wary about the economic landscape for the upcoming year.
Hargreaves Lansdown’s head of money and markets, Susannah Streeter, noted that “unease about the effect of Trump’s tariffs hangs over financial markets at the start of the week.” Furthermore, she indicated that the growing prospect of a recession, decreasing consumer confidence, and complex trade scenarios have heightened investor anxiety.
European stock markets, including those in London, Paris, and Frankfurt, also experienced declines amid fears that Germany’s incoming chancellor might face challenges in passing a considerable spending plan. David Morrison, a senior market analyst at Trade Nation, expressed that “risk sentiment has soured as investors react to President Trump’s various tariff announcements.”
Additionally, the European Union stated that the Trump administration does not seem inclined to negotiate a deal that would prevent tariffs against its 27-member bloc. Following the implementation of US tariffs on Chinese goods, Beijing retaliated with duties on certain US agricultural products.
XTB’s research director, Kathleen Brooks, highlighted concerns surrounding the political dynamics in Germany, particularly the Green party’s resistance to Friedrich Merz’s spending proposals designed to lift defense spending and establish a large infrastructure fund. She stated, “The news that Germany’s soon-to-be chancellor might not have free reign over Berlin’s purse strings has limited euro upside for now.”
Investor reaction to data revealing a 0.7 percent drop in Chinese consumer prices—the first decline in 13 months—further accentuated concerns about deflationary pressures in China. Stephen Innes from SPI Asset Management asserted that this data “reinforces what’s been clear for months.”
As of 1335 GMT, major stock figures included: Dow down 0.9% at 42,417.69 points; S&P 500 down 1.4% at 5,689.63 points; and Nasdaq down 2.1% at 17,813.25 points. International indices also reflected downturns, reinforcing the anxieties permeating financial markets globally.
The stock market downturn on Monday can be attributed to a combination of uncertainties surrounding President Trump’s trade policies and the potential for economic recession in the US. Investor concerns also extended to geopolitical issues in Europe, particularly regarding Germany’s political landscape and China’s economic data, indicating deflationary trends. Overall, the negative sentiment is prevalent across multiple regions, impacting financial markets and consumer confidence significantly.
Original Source: homenewshere.com
