Global Markets React Negatively to New Tariffs as Selloff Continues

LONDON — Global financial markets are experiencing significant turbulence following the announcement of sweeping new tariffs by the United States, with the FTSE 100 witnessing a sharp decline of 5.4% in trading early Monday.

Market analysts noted that the FTSE initially dropped over 6% before slightly rebounding as investors reacted to mounting pressures from international trade relations. Germany‘s DAX index initially plunged nearly 10%, now reflecting a 9.6% decrease, primarily driven by stocks like Rheinmetall, which fell nearly 21%.

“Wherever we look this morning, it’s a bloodbath,” said market analyst Ipek Ozkardeskaya at Swissquote Bank. She pointed to widespread losses across Asian markets, where the Hang Seng fell 12.5%, and the Shanghai Composite slid 8.7%.

The market’s volatility follows President Joe Biden‘s imposition of tariffs targeting numerous global trading partners, with responses from nations such as China already in motion; Beijing has announced a 34% tariff on U.S. goods in retaliation.

The market tumult prompted noticeable selloffs in the U.S. as well, with the S&P 500 losing 17% since February’s peak and the Nasdaq declining over 20%. Futures indicate a potential 3.4% drop for the S&P on the opening of U.S. markets today.

Several major European stocks, particularly within the FTSE 100, also suffered heavily. Glencore PLC saw a decline of 12.4%, while Rolls-Royce Group PLC and Babcock International Group PLC experienced reductions of 12.1% and 10.6%, respectively.

“Last week marked the beginning of a historical market selloff,” Ozkardeskaya commented. “The expectation that central banks will inevitably be forced into rate cuts further compounds this fear, as investors flock to government bonds.”

Market fluctuations come in conjunction with recent comments from Federal Reserve President Jerome Powell, who suggested there is no immediate rush to cut interest rates. Analysts suggest market instability may lead to a reevaluation of monetary policies as investors seek refuge in safer government bonds, driving their prices up while yields fall.

Crude oil prices are also in freefall, dropping below earlier levels recorded during the onset of the Ukraine invasion. Brent crude was priced at under $64 a barrel, marking a 2.5% decline. Natural gas prices in the U.K. hit 83.3p per therm, the lowest since September 2024.

Despite the grim outlook, Ozkardeskaya noted potential opportunities for investors: “I believe we will see incredible buying opportunities in a few weeks. Keep calm and don’t forget that markets always bounce back.”

Meanwhile, leading oil and gas companies such as Shell and BP are bracing for impacts from tariffs while grappling with falling global prices, which could further undermine their share values in the looming market recovery.

The tumultuous trading week ahead includes economic announcements such as the Halifax House Price Index (UK), Balance of Trade (Germany), and Retail Sales (EU). As investors adjust to the evolving market dynamics amid ongoing trade disputes, many will be closely monitoring their portfolios for further signs of recovery or decline.