Global markets sank on Monday, intensifying a broader sell-off sparked by US President Donald Trump’s trade offensive and China’s forceful retaliation to surprise tariff hikes.
Germany’s DAX dropped 9% at the open, while London’s FTSE 100 fell roughly 5%. European indices, overall, were holding up slightly better than their Asian counterparts. In Japan, the Nikkei 225 tumbled 7.9%, and the broader Topix index shed 7.7%. Sony, a tech sector heavyweight, saw its shares dive more than 10%.
Hong Kong’s markets, reopening after a public holiday, experienced a historic rout. The Hang Seng index plunged over 13%—its steepest single-day decline since 1997, according to the index’s records. On the mainland, the Shanghai Composite slumped 7.3%, and the blue-chip CSI300 slid by a similar margin.
“The US’s unexpected move to slap a 34% tariff on Chinese exports directly hit critical industries like semiconductors and electric vehicles,” noted Dilin Wu, a research strategist at Pepperstone. “This triggered a rapid and widespread repricing across Asian equities.”
Hong Kong also saw a spike in trading volume, which Wu interpreted as “clear evidence of broad-based forced liquidations and what can only be described as a full-blown panic.”
Asian equities followed Wall Street’s worst two-day stretch in five years. US futures sank Sunday night, following two bruising sessions that wiped out more than $5.4 trillion in market capitalization.
On Friday, US stocks nosedived after China announced sweeping retaliatory tariffs of its own—matching the US rate of 34% on all American imports. The move reignited fears of an escalating, potentially devastating trade war between the world’s two largest economies.
China’s ruling Communist Party issued a defiant message through its official newspaper, the People’s Daily, emphasizing that the country has a “strong capacity to withstand the pressure” of what it called “US tariff bullying.”
“Faced with America’s reckless tariff punches, we know exactly what we’re dealing with,” the commentary read. “We’ve built up a wealth of experience in this struggle over the past eight years, and we have many countermeasures at our disposal.”
Beijing’s latest retaliatory move marked a serious escalation compared to earlier tit-for-tat measures, rattling investors and triggering turmoil in markets worldwide.
Taiwan’s Taiex index dropped 9.7% Monday, with nearly all stocks—including major exporters TSMC and Foxconn—hitting circuit breakers. Both companies saw shares fall around 10%, according to Taiwan’s Central News Agency.
Oil prices extended their recent slide. Brent crude, the international benchmark, dipped more than 2.4%, while US benchmark WTI crude declined 2.5%.
Elsewhere in the Asia-Pacific region, Australia’s ASX 200 fell 4.2%, while New Zealand’s NZX 50—among the first markets to close on Monday—dropped 3.7%. South Korea’s Kospi lost 5.6%, and tech giant Samsung slid more than 5%.
Even gold, typically a safe haven in times of turmoil, saw sharp selling. Prices dropped over 4% since Thursday, now hovering around $3,030 an ounce.
Trump Brushes Off Market Jitters
US equities are poised for another steep drop at Monday’s open, pushing the S&P 500 dangerously close to bear market territory—a 20% fall from recent highs that could signal broader economic trouble.
Billionaire investor Bill Ackman of Pershing Square sounded the alarm, warning that Trump was “losing the confidence of business leaders around the globe.” He urged the president to halt further action to avoid what he called “an economic nuclear war.”
“By slapping massive, indiscriminate tariffs on allies and rivals alike, we’re initiating a global economic war,” Ackman tweeted. “That’s destroying our credibility as a trade partner, a business environment, and an investment destination.”
Speaking aboard Air Force One on Sunday night, Trump denied intentionally triggering the sell-off, but offered no guidance on where markets might go next.
