German Stock Index DAX Plunges 10% at Market Open, Citing US Tariff Strategy
The German DAX index opened Monday morning with a 10% drop, marking a loss of 3,900 points since the US announced its tariff strategy last week. According to a report by Handelsblatt on Monday, the new tariff reality is causing severe declines in the global stock market.
Major Asian stock indexes also suffered, following the US tariff move, as reported by Reuters on Monday and also in response to US President Donald Trump’s statement that he would not sign an agreement with China until the trade deficit was resolved.
Reuters provided examples of the global declines, including a 3.5% drop in S&P 500 futures, a 4.4% decline in Nasdaq futures, a 4.4% loss in EUROSTOXX 50 futures, a 2.1% drop in FTSE futures and a 4.2% decline in DAX futures. The Japanese Nikkei index fell by 6.6%, while the MSCI index for Asian-Pacific stocks dropped by 7.8%. Chinese standard stocks lost 6.3% and Taiwan’s main index fell by nearly 10%.
Stocks in all Asian emerging markets are also in a free fall. Meanwhile, oil prices are also plummeting, with Brent falling to $64.23 per barrel, a 1.35% decline and US crude dropping to $60.60 per barrel, a 1.395% decline.
Bruce Kasman, head of economic research at JPMorgan, estimated the risk of a downturn at 60%, as quoted by Reuters on Monday, describing the extent of the economic crisis caused by the US trade policy: “The extent and disrupting effects of US trade policy, if they persist, would be enough to push a still healthy American and global expansion into a recession.”
Only the US President can stop the declines, said Sam Callow, a currency analyst at ITC Markets, adding, “Only President Trump’s iPhone could break this cycle, but he shows little signs of being so concerned by the sell-off that he would reconsider his policy of the past decades.