Stock markets around the world are experiencing a sharp downturn as President Donald Trump’s “Liberation Day” draws closer. On Monday, financial markets from Wall Street to Wellington, New Zealand, posted significant losses, reflecting investor anxiety over the upcoming tariffs and economic policies set to be unveiled by the U.S. administration.
In New York, the S&P 500 index fell 0.6%, following one of its worst sessions in recent years on Friday. The index is on track to close the first quarter with a nearly 6% decline, marking its most challenging quarter in nearly three years.
As uncertainty grows, investors are flocking to safer assets. Gold prices surged, briefly surpassing $3,160 per ounce. U.S. Treasury bonds also gained traction, driving yields lower. The 10-year Treasury yield dropped to 4.22% from 4.27% on Friday, significantly down from 4.80% in January.
Set for April 2, Trump’s “Liberation Day” is expected to bring the introduction of “reciprocal” tariffs aimed at leveling the trade imbalance by matching taxes and fees imposed by foreign countries on American goods. Goldman Sachs economists anticipate an average 15% reciprocal tariff, warning that these measures could escalate inflation and stifle U.S. economic growth.
David Mericle, a Goldman Sachs economist, raised the probability of a U.S. recession within the next year to 35%, up from 20% previously. The revised forecast reflects concerns about reduced economic growth, eroding consumer confidence, and the administration’s apparent willingness to endure economic hardship for perceived trade benefits.
The tariffs could range from moderate to extreme, and uncertainty surrounding their scope has rattled investors. If the measures are less severe than anticipated, markets may rally. However, aggressive tariffs could trigger a deeper sell-off and potentially lead businesses to cut workforces—an outcome not yet observed.
Michael Wilson of Morgan Stanley warned that even if tariffs are less damaging than feared, the uncertainty they create could freeze consumer and business spending, threatening an economy that was robust just months ago.
Tech giants and electric vehicle companies were among the hardest hit on Wall Street. Tesla’s stock plunged 4.7% on Monday, deepening its 2025 loss to 37.8%. The electric carmaker’s fortunes have soured amid criticism of CEO Elon Musk, whose close ties to the Trump administration once buoyed investor sentiment.
Nvidia, a leading player in artificial intelligence technology, tumbled 4.1%, extending its year-to-date decline to 21.7%. The tech sector’s sharp drop follows concerns over valuations that have far outpaced earnings growth in recent years.
Stocks of companies reliant on consumer spending also suffered. United Airlines fell 4.8%, while Delta Air Lines slipped 2.8%.
Mr. Cooper, a home loan servicer, saw its shares surge 16.6% after announcing an all-stock acquisition by mortgage company Rocket valued at $9.4 billion. The acquisition follows Rocket’s recent purchase of real estate company Redfin. Rocket’s stock, however, dropped 7.8% on the news.
In Southeast Asia, Thailand’s SET index lost 1.5% after a devastating earthquake struck Myanmar (Burma), causing widespread damage. Shares in Italian Thai Development, which was constructing a 30-story high-rise that collapsed during the quake, plummeted 26.9%. Thai authorities are investigating the cause of the disaster, which left dozens missing.
As the world braces for Trump’s “Liberation Day,” investors face a volatile market landscape. The scope of the upcoming tariffs remains uncertain, with fears of a worst-case scenario triggering more losses. Analysts suggest April 2 may only serve as a stepping stone for further negotiations, prolonging the climate of uncertainty.
