In the trading session on Monday, US stocks faced a decline, but managed to recover some of the losses seen in premarket trading as investors assessed the impact of President Trump's dynamic tariff policy changes.
The S&P 500 index dropped by more than 3.5%, while the Nasdaq Composite, known for its focus on technology stocks, retreated by almost 4%. The Dow Jones Industrial Average fell by 3.1%, equivalent to a loss of 1,200 points.
Stock markets experienced significant declines after Trump indicated that he had no intention of altering his trade policies to appease market sentiments, stating that tough measures were sometimes necessary to address issues.
Investors were contemplating remarks made by Jamie Dimon, CEO of JPMorgan Chase, who believes that the newly implemented tariffs may not lead to a recession, despite cautioning about potential impacts on US economic growth and inflation.
Despite this insight, stock markets are anticipated to continue their recent sell-off trend. Last week, the Nasdaq Composite entered bear market territory, while the broader market recorded its most significant weekly decline since 2020, with a collective loss exceeding $5 trillion in value.
Concerns were raised as China announced retaliatory tariffs, and the EU prepared countermeasures in response to the US's latest 10% tariffs on various trading partners that came into effect recently. Further tariffs targeting specific countries are scheduled to be imposed this week.
Market conditions in Asia and Europe deteriorated sharply on Monday amid rising worries that Trump's firm stance on tariffs could lead to a global economic slowdown. Major indices like Japan's Nikkei 225 and Hong Kong's Hang Seng both entered bear market territory.
Oil prices experienced a nearly 3% decline, following a previous 4% drop that pushed prices below $60 per barrel, marking a level not seen since 2021.
US government officials defended Trump's tariff strategy over the weekend, asserting that negotiations were already underway with more than 50 countries. However, there are concerns about the practical challenges of implementing these tariffs, with Commerce Secretary Howard Lutnick indicating that the tariffs are expected to remain in effect for the foreseeable future.