The London Stock Exchange experienced a steep decline with the FTSE 100 dropping 3% and the FTSE 250 falling by 5%, heavily influenced by Donald Trump's tariff wars, which analysts warn may lead to a US recession. Asian markets followed suit, with Hong Kong's Hang Seng down nearly 13%, the sharpest decline since the pandemic for Europe’s STOXX 600. The situation highlights growing investor fears, while calls for emergency rate cuts increase amid the turbulent trading environment.
In fact, S&P 500 futures are currently down another 3.55% overnight, which, if realised, would see the index fall into bear market territory today, down more than 20% from its closing peak in mid-February.
Analysts at Deutsche Bank warned, "markets are still reeling from the announcement of US reciprocal tariffs last Wednesday, which has seen investors price in a growing probability of a US recession."
Further losses are on the cards in Europe and in US futures, suggesting the rush to get out at any price has not yet abated, said IG chief market analyst Chris Beauchamp.
The scale of the sell-off is now coming into line with some of the most aggressive drawdowns of the last decade.
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