The Nikkei share average in Japan plummeted nearly 9% on Monday, with bank stocks taking a particularly hard hit, dropping as much as 17%. This sharp decline is attributed to concerns over a tariff-induced global recession. All 225 component stocks of the index were trading in the red, and the broader Topix index sank 8%. The bank index has seen a drastic 30% fall over the past three sessions.
These market woes follow a global trend, with US Treasury yields falling as worries of a possible recession grow. Investors are betting on potential rate cuts by the Federal Reserve as early as May. JPMorgan has raised the odds of a US and global recession to 60%, and other brokerages have increased their estimates as well. The overall decline in markets has been attributed to President Donald Trump’s tariff policies and the escalating trade war with China.
Last week saw nearly $5 trillion wiped off global stock markets, with the US market hit particularly hard. Oil prices also fell over concerns of a trade war slowing the global economy. Investors are bracing for further fallout from Trump’s tariffs, with many expecting continued market turbulence. Trump, meanwhile, has stated that sometimes market declines are necessary to fix underlying issues, indicating that he is not intentionally engineering a selloff. Stay tuned for updates on these evolving economic developments.
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