Causes of the Stock Market Turbulence
The stock market turbulence on Monday morning was triggered by the announcement from U.S. President Donald Trump to impose tariffs on nearly all countries. This measure is part of a comprehensive tariff package aimed at correcting trade imbalances and shifting production back to the US. China responded with retaliatory tariffs of 34 percent on U.S. goods, further escalating the trade war. The EU is also planning countermeasures but is proceeding more cautiously to avoid exacerbating the situation.
Impacts on the Markets
The DAX experienced a dramatic drop of up to ten percent to 18,489 points on Monday, marking the largest single-day loss in a long time. Other global markets, such as the Nikkei and Hang Seng, suffered losses ranging from seven to twelve percent. The volatility index VIX reached its highest level since the corona crash, indicating extreme fear in the market.
Possible Effects on the Global Economy
Experts warn that the trade war could stoke inflation and burden the global economy. Political tensions between the U.S., China, and the EU may increase, with long-term negative consequences for global trade. However, some analysts see signs of an overselling situation that could lead to a recovery if serious talks occur.
Future Perspectives
There are indications of a potential market stabilization. Trump has already signaled willingness to negotiate, which could lead to a de-escalation.