Asian stocks rebound after their worst day on record, but Chinese shares look set for another rough start due to the ongoing trade spat. On 'Black Monday', waves of volatility shook markets anew.

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Stocks, bonds and commodities were whipsawed by another deluge of headlines around President Trump's trade war that only reinforced the clouds hanging over the outlook for investors. Shares in Japan and Australia advanced at the open, along with futures contracts for US and European stocks.

Contracts for Hong Kong pointed to losses after a gauge of US-listed Chinese shares fell more than 5 per cent. This came after Trump threatened to slap an additional 50 per cent tariffs on China for its retaliatory stance.

Traders looking for stocks to bottom after a selloff of trillions of dollars were faced with a series of twists and turns on Monday. While the S&P 500 moved away from the threshold of a bear market, its 7 per cent intraday swing was the biggest since 2020 when COVID hit global trading.

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Many metrics are at panic levels associated with meaningful bottoms over the past 40 years. Hedge funds recorded their largest-ever one-day net sales of global stocks. The slump has driven US stock valuations to their lowest level since late 2023.

The 15 minutes that rocked stock desks

Amidst the global selloff, the US stock market had a manic Monday. At just after 10 am US time, fake news erupted that Trump was weighing a suspension of tariffs. Within seconds, stocks soared wildly, erasing all of Monday morning's loss. The S&P 500 climbed as much as 3.4 per cent.

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As stocks started to surge, the S&P had added over 2.5 trillion dollars in value within seven minutes. Still, even after the white house denied the report and stocks gave back their gains, the selling fever subsided.

Stocks remained well above their Monday lows. The episode served as a reminder that it doesn't take much now to spark a sudden rally. That was the 15 minutes that rocked stock-market desks.

Volatility convulsed other markets as well, with traders continuing to price in a high risk of a global recession. The VIX index — known as the fear gauge — spiked to hold at pandemic-era levels. The brief halt to the US stock selloff, however, was a welcome respite after markets slid around the world.

China was particularly hard hit, with the Hang Seng index falling 13 per cent, its biggest slide since 1997. Europe's main gauge plunged to the lowest since December 2023, and Germany's DAX index briefly sank 10 per cent before recovering.

(With the inputs from the agencies)