Due to Trump’s tariff policies… Heavy losses at the global stock markets

Global markets, led by US stock exchanges, saw heavy losses at the start of trading this week due to investor uncertainty over US President Donald Trump’s tariff policy and growing concerns about a potential federal government shutdown, which has raised fears that the US economy could slide into recession.

On Sunday, March 9, 2025, the US President exacerbated investor and global market fears of a potential economic recession and slowdown in growth in the United States when he refused to speculate on whether the United States might face a recession amid stock market concerns about the impact of his tariff measures.

“What I have to do is build a strong country… You can’t be distracted by stock market movements,” he added during an interview with Fox News, a statement that sparked panic in financial markets.

After being given the opportunity to explain these comments later Sunday evening, Trump reinforced his remarks to reporters aboard Air Force One, saying, “Tariffs will be the greatest thing we’ve ever done as a country… They will make our country rich again”.

The US President’s comments weren’t isolated from those of his cabinet ministers.

The US Treasury Secretary Scott Besant said on Friday, March 8, 2025, that the world’s largest economy could slow down as government spending is cut and a policy aimed at strengthening the private sector is pursued.

The US President’s protectionist policies have disrupted markets around the world, particularly given the White House’s confusion over tariffs.

After Trump imposed 25% tariffs on Canada and Mexico, two of the United States’ main oil suppliers, on March 4, the US president reversed the decision and postponed its implementation, the latest development in a volatile trade policy that has shaken financial markets.

The exemptions for the United States’ two largest trading partners expire on April 2, the date on which Trump has threatened to impose a comprehensive system of countervailing tariffs on all of Washington’s trading partners.

In this report, we explore what an economic recession means and the impact of Trump’s tariffs and recent negative statements on global markets and even the fortunes of his billionaire supporters.

Some experts define it as a country’s gross domestic product (GDP) experiencing a decline for six consecutive months.

The US National Bureau of Economic Research defines a recession as a significant decline in most economic activities, which is naturally reflected in the GDP, real personal income, unemployment, industrial production, and wholesale and retail sales.

The US stocks fell on Monday, with Wall Street’s three major indexes suffering sharp declines.

According to preliminary data, the S&P 500 lost 155.21 points, or 2.69%, to close at 5,614.99, its biggest daily drop since December 18.

The Nasdaq Composite lost 726.01 points, or 4%, to close at 17,470.21, its biggest daily decline since September 2022.

The Dow Jones Industrial Average fell 890.63 points, or 2.08%, to close at 41,911.09.

The effects of the losses in US stock markets extended to Arab markets, which also witnessed significant declines.

The Dubai Financial Market topped the list of the most declining markets in the Gulf markets, while the Saudi and Abu Dhabi stock exchanges fell by more than 1%, and the Egyptian Exchange index recorded a decline of about 1%.
In Asian stocks, Japan’s Nikkei index fell on Tuesday to its lowest level in six months, tracking Wall Street, but it pared most of its losses at the close as US stock futures rose.

The Nikkei fell 0.64% to 36,793.11 points at the close, after falling to its lowest level of 35,987.13 points since September 17.

Japan’s broader Topix index, which performed better than the Nikkei, fell about 3% during the session to reach its lowest level since October 28.

The yen topped investors’ safe-haven list on Tuesday, touching a five-month high as US stocks and the dollar wobbled amid concerns that US economic growth could be slowed by tariffs.

The yen hit a five-month high of 146.55 to the dollar before settling around 147.24 to the dollar.

The yuan also rose 0.2% to 7.2426 to the US dollar.

The US dollar has fallen more than 7% from its six-month high hit in January against the yen, and its safe-haven appeal appears to be fading amid a sharp rise in the euro and a broader rethink of how tariffs and the trade war are impacting foreign exchange markets.

Oil prices fell in early trading on Tuesday, declining for a second day in a row, on concerns that US tariffs on Canada, Mexico, and China will slow economies around the world and hurt energy demand while OPEC+ increases supplies.

According to several stock market analytics, Trump’s comments triggered a wave of selling as investors began to price in the risks of weak demand growth.

When Trump was sworn in on January 20, 2025, he was surrounded by some of the world’s richest supporters.

The billionaires in attendance that day—including Elon Musk, Jeff Bezos, and Mark Zuckerberg—were never richer, reaping significant gains from booming stock markets.

Seven weeks later, the story is different, as the beginning of Trump’s second term has seen a stunning turnaround for many of the billionaires who attended his inauguration in the Capitol Hall, with five of them losing a combined $209 billion in wealth, according to the Bloomberg Billionaires Index.

The period between Trump’s election and inauguration was a boon for the world’s wealthy.

Investors flocked to stock markets and cryptocurrencies, hoping that Trump’s policies would be good for business.

Shares of Musk’s Tesla rose 98% in the weeks following the election, reaching a record high.

But expectations that the start of Trump’s new term would continue to fuel the wealth of his billionaire supporters have been turned upside down.

The companies behind the fortunes of inauguration attendees were among the biggest losers, losing $1.39 trillion in market value since January 17, the last trading day before the inauguration.

While Tesla CEO Musk’s fortune fell by $148 billion, Amazon owner Jeff Bezos’s, whose company donated $1 million to Trump’s inauguration, saw his wealth fall by $29 billion, while Meta CEO Mark Zuckerberg’s fortune fell by $5 billion.

Economists at JPMorgan Chase said the risk of an economic recession has risen to 40%, compared to a previous forecast of 30%, due to extreme US policies.

The Wall Street Journal quoted Goldman Sachs, which has consistently forecast above-consensus growth in recent years, as saying it expects weaker growth.

The firm’s economists raised the probability of a recession over the next 12 months to 20% from 15%.

Some analysts have warned that Trump’s recession comments may instead reflect a strategic effort to improve the country’s negotiating position with trading partners and force bond investors and the Federal Reserve to move toward lowering interest rates.

Indeed, Trump’s reckless behavior on trade and security has prompted authorities in China and Europe to take steps to increase spending on economic stimulus and defense, according to the Wall Street Journal.