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.
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.
‘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.
The Dow fell nearly 900 points on Monday, on a day President Trump kept his events closed to the press
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
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.’
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.
Trump warned of a potential recession during a Fox News interview
Stocks tanked on the news in early morning trading yesterday
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.’
New Chinese tariffs on U.S. exports began kicking in Monday after Trump slapped tariffs on Beijing. There was a 15 percent tariff on U.S. chicken, wheat and corn, plus a 10 percent tax on products including soybeans and beef.
All were designed to spread the effect of the hit to include Trump’s political base – with agriculture taxes hitting MAGA agriculture.
Trump 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.’
He also spoke about the duration of any hit on the U.S.
‘There is a period of transition, because what we’re doing is very big,’ Trump said .
‘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.
‘You know, we were probably overbloated with the stock market here for a while, we went up quite a bit,’ said Sen. Tommy Tuberville
The New York Stock Exchange on Wall Street on March 05, 2025, in New York City
With Trump down, Homeland Security Chief Kristi Noem, who unveiled a new app to allow illegal migrants to ‘self-deport’ came out to talk to Fox News at the White House Monday afternoon after markets had closed.
But she declined to stop to speak to a group of reporters who gathered to await her, and didn’t answer a shouted question about the tanking markets.
With Trump staying silent, Senate ally Tommy Tuberville (R-Ala.) told Fox Business that ‘President Trump has told people there’s going to be a little bit of pain with this. And there is.’
He described the suffering as necessary to meet Trump’s goals of slashing government spending.
‘We have no chance unless he does tarifs and holds people to what’s going on,’ he told interviewer Larry Kudlow.
Kudlow, a former Trump White House economic advisor during his first term, was more up beat. ‘This could have a much happier ending than people are suggesting,’ he predicted. Then he modified his statement to say it could have a happier beginning.
Tuberville said ‘People looking at the stock market like hey this is how it’s going to continue to be for months and months and months. That’s not going to happen. You know, we were probably overbloated with the stock market here for a while, we went up quite a bit,’ he said.
It was a shocking departure for Trump, who used to repeatedly crow about stock market gains, and even took credit for a jump in stocks during the transition period at the end of the Biden administration.
In New York, the tech-heavy Nasdaq fell around 4 per cent in early trading to its lowest level since September
Although Trump announced a pause on 25 percent tariffs on Canada and Mexico, Ontario announced Monday it was tacking a 25 percent surcharge on energy exports to the U.S.
On Trump’s schedule for Monday were a roundtable with tech CEOs, planned executive order signings, and a ceremonial swearing in for the director of the Secret Service. Trump flew in from Mar-a-Lago Sunday night.
There were indications the order signings could get bumped until Tuesday.
A White House official, asked about the downturn in the markets, brushed off the temporary movements.
‘Want to emphasize that we’re seeing a strong divergence between animal spirits of the stock market and what we’re actually seeing unfold from businesses and business leaders, and the latter is obviously more meaningful than the former on what’s in store for the economy in the medium to long term,’ the official said.
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