With his tariff package, US President Donald Trump has massively undermined investor confidence: the consequences for global markets are devastating, fears of a global trade conflict are growing, and worries about inflation and fears of recession are causing a new collapse in global stock markets.
On the Frankfurt Stock Exchange, trading began with the DAX index falling 10.4% to 18,489 points. For the first time since the beginning of January, the German stock barometer is trading below the 20,000 point mark, and the entire annual gain has been practically erased. For comparison: in mid-March, the DAX reached a record high of 23,476 points. The annual profit at that time was just under 18%.
A typical "panic Monday"?
With today's decline, the DAX follows a typical pattern. In a crash, the drastic losses from "Black Friday" usually continue into "panic Monday". It is only on Tuesday, the so-called "turning Tuesday", that an upward turn is reached. In the current situation, however, it is quite doubtful how sustainable a possible turn would be at all.
The panic reaction of investors also continued on the Asian stock exchanges. In Japan, the Nikkei index fell by 6.7% to 31,511 points. The Shanghai Stock Exchange fell by 7.3%, and the Hang Seng in Hong Kong - by 12.5%. And on Wall Street, Friday's decline is likely to continue today.
The worst week in years
So US President Donald Trump's tariffs continue to send shockwaves through the markets. On Friday, the Dow fell to its lowest level since the middle of last year. With a weekly decline of more than 8%, it was the worst week for the index in years. The DAX also recorded a weekly decline of more than 8% - its biggest loss in a trading week since the start of Russia's war against Ukraine in 2022.
The stock market earthquake also melted billions of assets of private investors. For all of them, Trump's statements about the collapse of the stock markets must sound like a mockery: "I think things are going very well", said the US president. "The markets will thrive, stocks will thrive, the country will thrive."
"Trump's "medicine"
"I don't want anything to collapse, but sometimes you have to take medicine to fix something," the US president also told journalists on board Air Force One.
On Sunday evening, Trump further fueled the panic in the markets by confirming his course. The US president insisted that the tariffs would be withdrawn only after the "problem" with the trade deficit is solved.
Meanwhile, fears of a global recession are putting additional pressure on oil prices. There are concerns about a sharp decline in demand for "black gold" if global economic growth weakens. At the same time, gold continues to be sought after. On Monday morning, its price rose by 0.8% to $3,025 per troy ounce.
Author: Angela Göpfert (ARD) | Daria Popova-Witzel (editor)