The Nikkei plunge nears 9% as Japanese bank stocks plummet. Japan’s Nikkei share average tumbled nearly 9% early on Monday, while an index of Japanese bank stocks plunged as much as 17%, as concerns over a tariff-induced global recession continue to rip through markets.
The Nikkei dropped as much as 8.8% to hit 30,792.74 for the first time since October 2023. The index was trading down 7.3% at 31,318.79, as of 0034 GMT, Reuters reports. All 225 component stocks of the index were trading in the red.
The broader Topix sank 8% to 2,284.69. A topix index of banking shares slumped as much as 17.3%, and was last down 13.2%. The bank index has borne the brunt of the sell-off in Japanese equities, plunging as much as 30% over the past three sessions.
Hong Kong and Chinese stocks dive
Hong Kong stocks have plummeted more than 9% at open, while Singapore stocks dropped over 7%, according to reports.
Hong Kong and Chinese stocks dived on Monday as markets around the world crumbled in the face of the widening global trade war and fears it will unleash a deep recession, Reuters says. Hong Kong’s Hang Seng index was down 8% in early trade. Shares in online giants Alibaba and Tencent were down more than 8%.
China’s CSI300 blue-chip index fell 4.5%. China, which is now facing US tariffs of more than 50%, responded in kind on Friday by slapping extra levies on US imports.
US Treasury yields fell on Monday and the two-year yield sank to a multi-year low as worries of a possible recession in the world’s largest economy grew and investors wagered that could see US rates cut as early as May. The two-year US Treasury yield, which typically reflects near-term rate expectations, tumbled more than 20 basis points to its lowest level since September 2022 at 3.4350%, as investors ramped up bets of more aggressive Federal Reserve easing this year, Reuters reports. The benchmark 10-year yield last stood at 3.9158%, languishing near Friday’s six-month low of 3.8600%
Futures now point to nearly 120 basis points’ worth of Fed cuts by December and markets swung to imply a roughly 60% chance the US central bank could ease rates in May, as policymakers seek to shore up growth in the world’s largest economy on the back of President Donald Trump’s latest tariff salvo.
JPMorgan ratcheted up its odds for a U.S. and global recession to 60%, as mentioned, and brokerages elsewhere similarly raised their probability of a US recession as tariff distress threatens to sap business confidence and slow global growth.
The market carnage came as White House officials showed no sign of backing away from their sweeping tariff plans, Reuters reports, and China declared the markets had spoken on their retaliation through levies on US goods.
Donald Trump says foreign governments will have to pay “a lot of money” to lift the sweeping tariffs he has characterised as “medicine” and which have routed Asian share markets.

From James Mackintosh
The 'Trump Thump' will go down alongside 1987’s Black Monday, 1929’s Black Thursday,
the dotcom crash and the pandemic as one of the worst times ever to be in the stock market."

Financial markets were hit by another wave of selling on Sunday evening, with investors and economists grappling with rising odds of a severe economic downturn caused by President Trump’s significant new tariffs on imports.
Futures on the S&P 500, which allow investors to bet on the index before the official start of trading on Monday, dropped roughly 4 percent on Sunday evening. In oil markets, which also open for trading on Sunday evening, prices fell more than 3 percent — adding to steep losses last week. And the price of copper, considered a broad economic indicator, slid more than 5 percent. The 10.5 percent drop in the S&P 500 on Thursday and Friday was the worst two-day decline for the index since the onset of the coronavirus pandemic in 2020.
The only other instances of a worse two-day drop came during the 2008 financial crisis and the 1987 stock market crash, according Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. In dollar terms, the more than $5 trillion that was wiped out in the S&P’s value in the two days last week stands unmatched.
Even more unusual is that last week’s sell-off stemmed directly from presidential policy. Mr. Trump has so far brushed off concerns about the market reaction and potential economic consequences, showing little intention of backing down. “If they’re maintained, the tariff hikes announced April 2 represent a self-inflicted economic catastrophe for the United States,” Preston Caldwell, senior US economist for Morningstar Research Services, said in a blog post on Friday.
Chief executives have begun warning consumers that they should expect prices to increase on some groceries, clothes and other products. Consumers have said they intend to rein in spending on big-ticket items. Some auto companies have already announced production pauses overseas, as well as job losses domestically. Bank economists have raised the odds that a recession will hit the United States over the next 12 months. As countries responded last week with tariffs of their own, the sell-off in financial markets accelerated.
The S&P 500 is now 17.4 percent below its peak reached in February, on course to enter a bear market, defined as a drop of 20 percent or more from a recent peak. The Nasdaq Composite index, which is chock-full of tech stocks that came under pressure as the sell-off accelerated last week, is already in a bear market, down almost 23 percent from its December peak. The Russell 2000 index of smaller companies that are more sensitive to the outlook for the economy has fallen over 25 percent from its November peak.
Scott Bessent, the Treasury secretary, said on Sunday on the NBC program “Meet The Press” that he saw “no reason” to expect a recession.

There was little rest on Wall Street this weekend. There was plenty of anger, anxiety, frustration, and fear.
Anger at President Trump for a brash and chaotic rollout of tariffs that erased trillions of dollars in value from the stock market in two days. Anxiety about the state of the private equity industry and other colossal funds with global investments. Frustration among Wall Street’s elite at their sudden inability to influence the president and his advisers.
And fear of what may come next. Major banks played out emergency scenarios to guess whether one client or another would fail in the cascading effects of an international trade war.
In conversations with The New York Times over the weekend, bankers, executives and traders said they felt flashbacks to the 2007-8 global financial crisis, one that took down a number of Wall Street’s giants. Leaving out the brutal, but relatively short-lived market panic that erupted at the start of the coronavirus pandemic, the velocity of last week’s market decline — stocks fell 10 percent over just two days — was topped only by the waves of selling that came as Lehman Brothers collapsed in 2008.
Like then, the breadth of the sudden downdraft — with oil, copper, gold, cryptocurrencies and even the dollar caught up in the sell-off — has Wall Street’s biggest players wondering which of their competitors and counterparties was caught off guard. Banks have asked trading clients to post additional funds if they want to continue borrowing money to trade — so-called margin calls that haven’t nearly reached the level of a generation earlier but are nonetheless causing unease.
“It definitely feels similar to 2008,” said Ran Zhou, a New York hedge fund manager at Electron Capital, who canceled weekend plans and put on a button-up shirt to sit in his Manhattan office and read Chinese news sources to get the jump on China’s plans.
There were some bright spots. Several bank and hedge fund executives pointed out that, despite the frenzied selling, trading in the wake of the tariff announcement had so far proceeded without any unexpected glitches, a point that Mr. Bessent also made on Sunday. A senior executive at one major bank also said there was relief after a call on Friday night with the bank’s regional heads and top executives that nobody could point to a specific client in danger of immediate implosion.
The true depth of the impact is yet to be determined. Bank of America estimates that profits for companies in the S&P 500 may fall by one-third if retaliatory levies are enacted by the countries subject to Mr. Trump’s tariffs. But the dire assessments could change, if countries begin to strike agreements with the White House that will lower the tariffs.
Two private equity executives said they expected that market turmoil and souring global relations would make it more difficult for private firms like theirs to raise money, adding to the challenges they are already facing as a dwindling deals market has made it harder to return cash to their investors. Pressures on those firms will only increase as the businesses they invest in begin to feel the impact of tariffs, these executives said. Shares of Apollo and KKR fell more than 20 percent on Thursday and Friday.
One prominent deals lawyer described himself as “flabbergasted” as he grappled with how far the share prices of his clients had fallen. A top Goldman Sachs executive summed up the frustration with Mr. Trump succinctly: Someone has to stop him.
Steve Eisman, the investor made famous in “The Big Short” for having foreseen the 2007-8 housing market collapse, said some humility was in order: “Everybody in the stock market went to college and everyone who went to college took Econ 101 and had it drummed into their heads that trade wars are bad,” Mr. Eisman said on Saturday. He suggested that investors were ignoring the potential that the United States, thanks to its economic strength, may be the best positioned of any nation to prosper in such scenarios.

Markets brace for another volatile week as Trump’s most punitive tariffs kick in
Rob Davies
Sun 6 Apr 2025 14.09 EDT
Markets are braced for another rollercoaster week as the most punitive of Donald Trump’s tariffs kick in and world leaders weigh up retaliatory action, adding to fears of a global recession. Stock indices plunged by nearly $5tn (£3.9tn) last week, with markets in the UK and US experiencing losses not seen since the early days of the Covid-19 pandemic, as investors took cover from the opening salvoes of Trump’s trade war.
With no sign of the Trump administration rowing back on its so-called “liberation day” tariffs, analysts warned of persistent market turbulence and an increased risk of all-out recession in the US, UK and EU.
However, leading figures in the Trump administration warned on Sunday against expectations for a U-turn. Speaking in television interviews, Howard Lutnick, the commerce secretary, said the US president intended to “reset global trade”.
EU leaders are still considering their response, while Keir Starmer, the UK prime minister, has vowed to “shelter” British businesses from the impact of tariffs, indicating he will announce what steps he plans to take this coming week. Starmer is expected to pursue an economic reset, which could ultimately include a rethink of Labour’s promise not to raises taxes, in anticipation of a global trade slowdown.
On Sunday, the Treasury minister Darren Jones told the BBC that the era of globalisation has “come to an end”, although he said the UK was still hopeful of striking a trade deal with the White House. The 10% rate imposed on the UK is at the lowest end of the range of Trump’s tariffs, with the exceptions of Russia, North Korea, Belarus and Cuba, which were left out of the worldwide trade dispute altogether.
But Trump had already imposed a 25% tariff on UK steel and cars, a measure that prompted Jaguar Land Rover to say over the weekend that it was pausing shipments to the US, which buys about a quarter of the 400,000 vehicles the company sells annually. Economic forecasters said the unexpectedly widespread and punitive nature of the tariffs could still tip the UK economy into decline.
Analysts at Barclays said the UK and EU were at risk of falling into recession in the second half of this year and they revised down their growth forecasts for both economies, as well as for the US.
On Saturday, the world’s richest person, Elon Musk, who has emerged as Trump’s most powerful ally in global business world, told a meeting of Italy’s rightwing League party that he hoped a “free-trade zone” between the EU and US could be created, with no tariffs at all. But duties of 20% on European imports to the US technically take effect at one minute past midnight on Wednesday, as does the 34% rate for China, the world’s biggest export nation, and others deemed by the White House to be among the “worst offenders”, which includes Japan and Vietnam.
Leaders of European countries have condemned the tariffs, while the French president, Emmanuel Macron, appeared to call on the country’s businesses to halt investment in the US. The president of the European Commission, Ursula von der Leyen, has called for negotiation with the US. However, the EU is expected to announce retaliatory tariffs on US consumer and industrial goods – which are likely to include emblematic products such as orange juice, denim and Harley-Davidson motorbikes – in mid-April as a response to steel and aluminium tariffs previously announced by Trump.
While Beijing has already responded with retaliatory tariffs, George Magnus, an expert on China’s economy, said a deal in the longer term was still possible. “Neither Trump nor [the Chinese president] Xi Jinping want a full-blown trade war right now,” said Magnus, who is the former chief economist at the Swiss bank UBS and a research associate at Oxford University’s China Centre and Soas University of London.

“You see, at first, when someone says, ‘Let’s impose tariffs on foreign imports,’ it looks like they’re doing the patriotic thing by protecting American products and jobs. And sometimes for a short while it works —but only for a short time.”
Reagan added: ”What eventually occurs is: First, homegrown industries start relying on government protection in the form of high tariffs. They stop competing and stop making the innovative management and technological changes they need to succeed in world markets. And then, while all this is going on, something even worse occurs. High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars.
“The result is more and more tariffs, higher and higher trade barriers, and less and less competition. So, soon, because of the prices made artificially high by tariffs that subsidize inefficiency and poor management, people stop buying.”
Reagan concluded: “Then the worst happens: Markets shrink and collapse; businesses and industries shut down; and millions of people lose their jobs.”