Global stock markets tumbled yesterday as fears Donald Trump’s trade war will tip the US into recession sparked ‘absolute despair’ among investors and a stinging rebuke from Mark Carney.
On another day of turmoil, the FTSE 100 tumbled 0.9 per cent or 79.66 points to 8600.22 while the main benchmark in Germany fell 1.75 per cent.
In New York, the tech-heavy Nasdaq fell around 4 per cent in early trading to its lowest level since September while the S&P 500 and Dow Jones Industrial Average were also on the slide.
The latest sell-off came amid mounting fears that a trade war triggered by President Trump’s tariffs will weaken the global economy and push the US into recession.
‘Unease about the effect of Trump’s tariffs hangs over financial markets,’ said Susannah Streeter, head of money and markets at Hargreaves Lansdown. ‘The prospect of a recession in the US is lurking.’
Asked if he was expecting a recession in the US this year, Mr Trump admitted there was a ‘period of transition’ taking place but dismissed concerns about the stock market.
He also refused to rule out a recession in an interview with Maria Bartiromo on ‘Sunday Morning Futures’ on Fox News.
‘I hate to predict things like that,’ Trump said. ‘Look, we’re going to have disruption, but we’re OK with that.
‘There is a period of transition, because what we’re doing is very big.
Global stock markets tumbled yesterday as fears Donald Trump’s (pictured) trade war will tip the US into recession
Traders work on the floor of the New York Stock Exchange on Wall Street on Monday, March 10
A board on the floor of the New York Stock Exchange shows the Dow Jones Industrial Average below 500 points after the opening bell on Wall Street on Monday, March 10, 2025 a day after Trump’s comments on a recession
‘We’re bringing wealth back to America. That’s a big thing. … It takes a little time, but I think it should be great for us.’ Trump said tariffs ‘may go up’ when Bartiromo tried to press him on the ‘uncertainty’ caused by leveling threats and then pausing or lifting them.
‘What I have to do is build a strong country,’ he said. ‘You can’t really watch the stock market.’
That marked a departure from his first term in office when Mr Trump regularly pointed to stock market gains as evidence his policies were working.
US stocks rose strongly after his latest election victory in November but those gains have been wiped out in recent weeks as concerns over tariffs and the wider economy mount.
Mr Carney, the former Bank of England governor who is taking over from Justin Trudeau as prime minister of Canada, slammed the ‘unjustified tariffs’ and vowed to win the trade war.
‘Americans should make no mistake. In trade, as in hockey, Canada will win,’ he said.
Mr Carney, who will take office after being elected Liberal Party leader in a landslide on Sunday night, said Canada will now pursue trade with more ‘reliable partners’ and insisted dollar-for-dollar retaliatory tariffs would stay in place ‘until the Americans show us respect’.
Gennadiy Goldberg, head of US interest rate strategy at TD Securities, told Bloomberg: ‘Just a couple of weeks ago we were getting questions about whether we think the US economy’s re-accelerating – and now all of a sudden the R word is being brought up repeatedly. The market’s gone from exuberance about growth to absolute despair.’
Donald Trump warned of a potential recession during a Fox News interview on Sunday
Mr Trump imposed 25 per cent tariffs on imports from Mexico and Canada last week before backtracking and giving certain goods an exemption.
He has also doubled the blanket tariff on goods from China to 20 per cent – with Beijing responding with tit-for-tat levies on certain US farm products.
Holger Schmieding, chief economist at Berenberg Bank, branded Trump an ‘agent of chaos and confusion’ and said his ‘zigzagging on tariffs shows that he has little idea of the potential consequences’ of his actions.
Dan Coatsworth, investment analyst at AJ Bell, said the ‘euphoria’ around Trump’s return to the White House has ‘fizzled away’.
He added: ‘Investors are beginning to realise that Trump’s policies might have negative consequences, even for people in the US where the prospect of recession is now being talked up.
‘A trade war is unsettling and there are far-reaching consequences if it blows up.’
