Global Stock Markets Crash as Trump’s Tariff Announcement Sparks Economic Uncertainty

Stock Market Crash: Global Recession Fears After Trump’s Tariff Announcement

The global stock, commodity, and forex markets have been in turmoil following U.S. President Donald Trump’s announcement of new tariffs. Yesterday, the Dow Jones plunged 1,679.39 points, marking its biggest drop since the COVID-19 market crash on March 16, 2020. The Nasdaq also saw a sharp decline of 1,050.44 points.

Sensex Plummets by 1,035 Points

Amid global recession fears, the Indian stock market has also taken a significant hit. The Sensex dropped 1,054.81 points, reaching an intra-day low of 75,240.55. Only eight stocks in the Sensex pack managed to register a modest 1.42% gain, while 22 stocks witnessed declines of up to 8%. The biggest losers included:

Tata Steel (-8.01%)
Tata Motors (-6.62%)
L&T (-4.80%)
Adani Ports (-4.46%)
IndusInd Bank (-4.28%)

The Nifty 50 also witnessed a sharp decline, breaking the 23,000 level and reaching a low of 22,857.45. It was last trading at 22,888.65, down 361.45 points.

Small-Cap Stocks Suffer Heavy Losses

The market downturn has hit small-cap investors the hardest. The BSE SmallCap index plunged over 1,789.05 points, with several stocks witnessing a 20% decline. Of the 918 small-cap stocks, only 57 closed in the green, while the rest ended in negative territory. The MidCap index also dropped by more than 1,400 points.

Key Reasons Behind the Stock Market Crash

1. Global Trade War Concerns

Trump’s new tariffs have sparked retaliatory measures from China and Canada, escalating fears of a global trade war.
India has yet to make an official statement on the issue.
Investors fear that an extended trade war could slow global economic growth, leading to cautious market sentiment.

2. Sectoral Pressure

Major stock market sectors have taken a hit due to rising economic uncertainties:

Energy (-3.94%)
Healthcare (-3.39%)
IT (-3.77%)
Auto (-2.95%)
Capital Goods (-4.33%)
Metals (-6.43%)
Oil & Gas (-4.22%)
Power (-3.26%)
Real Estate (-4.15%)

3. Inflation Concerns

Higher tariffs are expected to increase import costs in the U.S., leading to rising inflation.
The Dollar Index has also weakened, signaling potential economic instability in the U.S.

Is a Global Recession on the Horizon?

Economic experts predict that Trump’s tariff policies could slow global economic growth. Deutsche Bank economist Brett Ryan estimates that these tariffs could reduce U.S. GDP by 1-1.5%, increasing the risk of a recession.

While India has not yet faced an economic crisis, heightened market volatility suggests continued uncertainty ahead.