The global financial markets were rocked by a severe downturn following President Donald Trump’s latest tariff announcements. The Asian markets, in particular, bore the brunt of the selloff. Hong Kong’s market saw a staggering 14% drop, its most significant decline since the 1997 Asian Financial Crisis. Taiwan and Japanese markets also took a hit, tumbling 10%. Chinese stocks fell 7%, prompting reports that Beijing is considering accelerating stimulus measures to cushion the impact. China has already responded with a retaliatory 34% tariff on all U.S. goods.
European markets also suffered significant losses, with major indices including the FTSE 100, DAX, and CAC 40 each declining more than 5%.
The global selloff spared no market, not even the cryptocurrency market. Bitcoin, the leading cryptocurrency, dropped 10% in just 24 hours, falling below $75,000. Ethereum, another significant player, suffered a substantial 22% decline. Other major cryptocurrencies, including XRP and SOL, plunged over 20%, and DOGE fell more than 15%. Bitcoin’s market dominance has reached 63%, a level not seen since early 2021, while the CoinDesk 20 index shed almost 12% in the past day.
Trump defended his stance on Truth Social, stating, “We have massive financial deficits with China, the European Union, and many others. The only way this problem can be cured is with tariffs, which are now bringing tens of billions of dollars into the U.S.”
Amid the market turbulence, U.S. bonds have emerged as a haven, showcasing their unexpected resilience. The 10-year note is up 8% year-to-date, and the iShares 20+ Year Treasury Bond ETF has gained 6% as investors seek safety in government debt, pushing yields lower – a development welcomed by the U.S. administration.
Amid the market turbulence, some investors are finding opportunities. Bill Ackman, a prominent investor, noted that Secretary of Commerce Howard Lutnick appears unconcerned about potential economic fallout. This suggests that Lutnick and Cantor Fitzgerald might be positioned to benefit from a market downturn through bond investments.
Some countries are already taking steps to avoid the tariffs, with Argentina, Taiwan, and India showing signs of removing tariffs on U.S. imports. This global response underscores the interconnectedness of the financial markets and the measures being taken to mitigate the impact. Market volatility is expected to persist, as evidenced by the Volatility S&P 500 Index (VIX) reaching 60 in pre-market trading – its highest level since August 2024. Investors are advised to remain vigilant in these uncertain times.