Global financial markets are preparing for a potentially volatile week as investors await Washington's next move on Iran. Asian markets slipped amid uncertainty over possible new U.S. sanctions, while traders closely monitored developments in energy markets.


Global markets on edge as investors await new US action on Iran

Trade tensions between the United States and China have intensified as Beijing announced a fresh round of sanctions targeting multiple U.S.-linked entities while tightening export controls on its globally dominant drone industry.

The new measures could affect international buyers and disrupt global supply chains for commercial and industrial drones used in logistics, agriculture, surveillance, and defense. Analysts say the tighter export controls may impact pricing, availability, and innovation across global markets.

Meanwhile, Chinese consumers have reacted strongly to recent U.S. actions against certain Chinese food brands, highlighting how geopolitical disputes are increasingly influencing consumer behavior and business decisions.

China Hits U.S. With Fresh Sanctions, Tightens Drone Export Controls Amid Trade Tensions

China has announced a fresh round of sanctions targeting multiple U.S.-linked entities while tightening export controls on its globally dominant drone industry, adding another chapter to the ongoing U.S.-China trade tensions.

Beijing's stricter oversight of drone exports could affect international buyers and disrupt global supply chains across sectors including logistics, agriculture, surveillance, and defense. The move is expected to have implications for pricing, availability, and innovation in commercial drone markets.

Meanwhile, public sentiment in China has intensified following U.S. actions against certain Chinese food brands over alleged forced labor concerns. According to reports, many Chinese consumers have criticized the U.S. measures, highlighting how geopolitical disputes are increasingly influencing consumer behavior.

US-China Trade War Escalates | Beijing Targets American Entities and Drone Exports

Saudi Arabia's economy has contracted 4.8% year-on-year in the second quarter, according to flash estimates, highlighting the kingdom's continued dependence on oil revenues despite years of economic diversification efforts.

The decline was driven primarily by a 24.7% drop in oil-related activities, while non-oil sectors provided only limited support. The latest figures come as geopolitical tensions across West Asia continue to influence oil production, energy markets, and global supply chains.

Although Saudi Arabia's Vision 2030 aims to reduce reliance on hydrocarbons, the latest GDP data underscores the challenges of transforming an economy still heavily tied to crude oil exports.

Saudi Arabia's Economy Shrinks 4.8% as Oil Slump and West Asia Tensions Weigh on Growth

Europe’s energy market is facing renewed pressure as gas prices surge amid an intense global LNG competition. European LNG futures climbed to around 62 euros per megawatt-hour, reaching their highest level since earlier market turbulence triggered by the Iran-Israel conflict. Prices have jumped nearly 50% from June levels, when they were trading in the 40–42 euro range.

Economic gloom hits UK's Gen Z | World Business Watch 

European gas prices are flashing red again. LNG futures touched 62 euros, or about 70 dollars, per megawatt-hour on July 22nd, the highest since the Iran-Israel conflict rattled markets earlier this year. It is up nearly 50 percent from June's 40-42 euros range. The reason isn't a new supply shock. It's a bidding war Europe is losing.

Europe Loses LNG Bidding War to Asia | World Business Watch 

The European Central Bank has kept interest rates unchanged, as widely expected. But while the decision itself was uneventful, the message from ECB President Christine Lagarde was notably more cautious.

Oil shock back for Global Central Banks | World Business Watch 

Asian equities staged a strong rebound on Tuesday as buyers returned to technology and semiconductor heavyweights.

What's moving global markets today?

IBM shares plunged 25% in their steepest single-day decline since 1968 after the company issued a preliminary earnings warning that fell short of Wall Street expectations. The sharp selloff wiped out more than $100 billion in market value and erased much of the company's AI-driven gains from earlier this year.

IBM blamed weaker-than-expected results on a global memory chip shortage, saying customers redirected spending toward AI servers, storage, and memory hardware instead of software and mainframes. The warning also weighed on the broader technology sector, with software stocks declining while chipmakers and storage companies gained as investors shifted toward AI infrastructure.

IBM shares plunge 25% after shock earnings warning, ai chip shortage hits software demand

In today's Newsroom roundup, global markets gained after softer US inflation eased concerns over an immediate Federal Reserve rate hike, while China's slowing economy and rising oil prices kept investors cautious. In technology, Meta faces a lawsuit from former employees over alleged AI-assisted layoffs targeting workers with disabilities and those on medical leave. Switzerland has also launched an investigation into Google over changes to Android's default search options, while reports claim Iran exploited telecom vulnerabilities to track US military personnel. In sports, Spain defeated France 2-0 to reach the FIFA World Cup Final, while Argentina prepare to face England in the second semi-final. In cricket, India ended their winless streak with a six-wicket victory over England in the first ODI.

Global markets rally | Meta sued over AI layoffs | Iran tracked US troops? | India beat England

Global markets were rocked after a massive $1 trillion selloff in technology stocks reignited debate over whether the AI boom has become overheated. The sharp decline in chipmakers triggered volatility across Asian markets, though some indices, including South Korea's, staged a strong rebound. Investors are now weighing whether the correction is a temporary setback or a warning sign for AI-driven valuations.


$1 Trillion Chip Crash Shakes Markets, AI Bubble Fears Return To Wall Street

#Gravitas A tentative peace agreement between the United States and Iran has sparked a broad rally across global financial markets. Investors welcomed reports that the deal would keep the strategic Strait of Hormuz open, reducing fears of a prolonged disruption to global energy supplies.


US-Iran Peace Deal: Global Stocks Rally on Peace Breakthrough

Wall Street closed a volatile week on a high note amid renewed peace progress hopes. The run-up in SpaceX boosted investor confidence, leading some on Wall Street to believe other stocks may be undervalued.


What Moved Global Markets This Week?

The Iran conflict is rapidly redrawing the global investment landscape, creating distinct market winners and losers as investors reposition around energy shocks, geopolitical risk and defensive assets. An analysis of global markets shows oil producers, defence-linked sectors, AI-driven technology stocks and the US dollar benefiting from the crisis, while airlines, energy-importing economies and vulnerable currencies face mounting pressure.&nbsp;Oil prices have risen sharply amid fears of supply disruptions across the Middle East, with investors closely monitoring shipping activity through the Strait of Hormuz, one of the world’s most important routes for crude exports. Reuters reported that oil prices have climbed by roughly 40 per cent since the conflict escalated, dramatically altering expectations around inflation, interest rates and global growth. In physical markets, crude has remained well above $100 a barrel and, at one stage in early April, briefly traded at nearly twice its pre-war level. The surge has strengthened oil-exporting economies and energy companies, while sharply increasing operating costs for sectors heavily dependent on fuel, particularly aviation and logistics. Although a record 400-million-barrel release from strategic petroleum reserves by major economies, along with alternative sourcing by traders, has softened some supply pressures, strain across the global energy system continues to intensify.&nbsp;ALSO READ:&nbsp;<a href="https://www.wionews.com/science/ai-beats-human-forecasters-in-tournament-predicting-outcomes-for-30-tech-ventures-1779875686948">AI beats human forecasters in tournament predicting fate of 30 technology startups</a>&nbsp;Reuters also noted that airlines have come under pressure from both higher fuel costs and disruptions to regional airspace. Earlier this month, Air India temporarily suspended select international routes due to rising aviation turbine fuel (ATF) prices and airspace restrictions, while increasing international fuel surcharges by $10 to $50 per passenger. IndiGo also introduced a fresh fuel surcharge as escalating oil prices pushed operating costs higher. Several carriers have been forced to reroute or suspend flights across parts of the Gulf region, adding operational strain at a time when fuel prices are already climbing.&nbsp;<h2>AI and defence stocks emerge among strongest gainers</h2><h2>&nbsp;</h2>Despite the broader geopolitical uncertainty, investors have continued pouring capital into artificial intelligence-linked companies, particularly large US technology firms. Reportedly, AI-related stocks have remained resilient even as wider market volatility increased, reinforcing their position as a dominant force in global equity markets.&nbsp;South Korea’s SK Hynix crossed the $1 trillion market valuation mark for the first time on Wednesday, joining memory chip rivals Samsung Electronics and Micron Technology as surging investor demand for AI-linked semiconductor stocks continued to drive gains across the global chip sector, Reuters reported.&nbsp;ALSO READ:&nbsp;<a href="https://www.wionews.com/world/hong-kong-dethrones-switzerland-as-global-cross-border-wealth-capital-report-shows-1779867448139">Hong Kong dethrones Switzerland as global cross-border wealth capital, report shows</a> Defence and cybersecurity firms have also attracted stronger investor interest amid rising security concerns and expectations of increased military spending globally. At the same time, traditional safe-haven assets including the US dollar and gold have strengthened as investors seek protection from geopolitical instability. The report suggests markets are increasingly splitting into sectors that benefit from prolonged instability and those exposed to inflation, fuel dependency and weakening trade conditions.&nbsp;<h2>Fashion and luxury sector</h2> The global luxury sector is entering a phase of stabilisation rather than contraction, according to Kearney’s 2026 Global Luxury Industry Outlook, which projects market growth of 2–4 per cent this year, lower than broader industry forecasts of 3–5 per cent. The report says luxury brands are navigating slower demand, changing consumer behaviour and persistent economic uncertainty, with growth expected to diverge sharply across regions, product segments and buyer demographics.&nbsp;ALSO READ:&nbsp; <a href="https://www.wionews.com/world/why-trump-s-abraham-accords-push-is-a-non-starter-and-what-s-driving-it-1779805064408">Why Trump’s Abraham Accords push is a non-starter and what’s driving it?</a>&nbsp;&nbsp;<h2>Emerging economies and airlines face growing strain</h2><h2>&nbsp;</h2>The economic pressure is particularly visible in energy-importing regions across Asia and parts of Europe, where rising oil costs threaten to intensify inflation and weaken currencies. Reuters highlighted that Asian currencies and bond markets have faced renewed stress as investors move capital towards safer assets.&nbsp;Meanwhile, the conflict is reinforcing a wider global market divide. Oil exporters, AI-driven technology firms and safe-haven assets continue attracting flows, while sectors dependent on cheap energy and stable trade routes face mounting uncertainty. The result is an increasingly polarised market environment shaped as much by geopolitics as by economic fundamentals. &nbsp;

An analysis of global markets shows oil producers, defence-linked sectors, AI-driven technology stocks and the US dollar benefiting from the crisis, while airlines, energy-importing economies and vulnerable currencies face mounting pressure.

The Iran conflict is rapidly redrawing the global investment landscape, creating distinct market winners and losers as investors reposition around energy shocks, geopolitical risk and defensive assets. An analysis of global markets shows oil producers, defence-linked sectors, AI-driven technology stocks and the US dollar benefiting from the crisis, while airlines, energy-importing economies and vulnerable currencies face mounting pressure. Oil prices have risen sharply amid fears of supply disruptions across the Middle East, with investors closely monitoring shipping activity through the Strait of Hormuz, one of the world’s most important routes for crude exports. Reuters reported that oil prices have climbed by roughly 40 per cent since the conflict escalated, dramatically altering expectations around inflation, interest rates and global growth. In physical markets, crude has remained well above $100 a barrel and, at one stage in early April, briefly traded at nearly twice its pre-war level. The surge has strengthened oil-exporting economies and energy companies, while sharply increasing operating costs for sectors heavily dependent on fuel, particularly aviation and logistics. Although a record 400-million-barrel release from strategic petroleum reserves by major economies, along with alternative sourcing by traders, has softened some supply pressures, strain across the global energy system continues to intensify. ALSO READ: AI beats human forecasters in tournament predicting fate of 30 technology startups Reuters also noted that airlines have come under pressure from both higher fuel costs and disruptions to regional airspace. Earlier this month, Air India temporarily suspended select international routes due to rising aviation turbine fuel (ATF) prices and airspace restrictions, while increasing international fuel surcharges by $10 to $50 per passenger. IndiGo also introduced a fresh fuel surcharge as escalating oil prices pushed operating costs higher. Several carriers have been forced to reroute or suspend flights across parts of the Gulf region, adding operational strain at a time when fuel prices are already climbing. AI and defence stocks emerge among strongest gainers Despite the broader geopolitical uncertainty, investors have continued pouring capital into artificial intelligence-linked companies, particularly large US technology firms. Reportedly, AI-related stocks have remained resilient even as wider market volatility increased, reinforcing their position as a dominant force in global equity markets. South Korea’s SK Hynix crossed the $1 trillion market valuation mark for the first time on Wednesday, joining memory chip rivals Samsung Electronics and Micron Technology as surging investor demand for AI-linked semiconductor stocks continued to drive gains across the global chip sector, Reuters reported. ALSO READ: Hong Kong dethrones Switzerland as global cross-border wealth capital, report shows Defence and cybersecurity firms have also attracted stronger investor interest amid rising security concerns and expectations of increased military spending globally. At the same time, traditional safe-haven assets including the US dollar and gold have strengthened as investors seek protection from geopolitical instability. The report suggests markets are increasingly splitting into sectors that benefit from prolonged instability and those exposed to inflation, fuel dependency and weakening trade conditions. Fashion and luxury sector The global luxury sector is entering a phase of stabilisation rather than contraction, according to Kearney’s 2026 Global Luxury Industry Outlook, which projects market growth of 2–4 per cent this year, lower than broader industry forecasts of 3–5 per cent. The report says luxury brands are navigating slower demand, changing consumer behaviour and persistent economic uncertainty, with growth expected to diverge sharply across regions, product segments and buyer demographics. ALSO READ: Why Trump’s Abraham Accords push is a non-starter and what’s driving it? Emerging economies and airlines face growing strain The economic pressure is particularly visible in energy-importing regions across Asia and parts of Europe, where rising oil costs threaten to intensify inflation and weaken currencies. Reuters highlighted that Asian currencies and bond markets have faced renewed stress as investors move capital towards safer assets. Meanwhile, the conflict is reinforcing a wider global market divide. Oil exporters, AI-driven technology firms and safe-haven assets continue attracting flows, while sectors dependent on cheap energy and stable trade routes face mounting uncertainty. The result is an increasingly polarised market environment shaped as much by geopolitics as by economic fundamentals.

An analysis of global markets shows oil producers, defence-linked sectors, AI-driven technology stocks and the US dollar benefiting from the crisis, while airlines, energy-importing economies and vulnerable currencies face mounting pressure.

Oil spikes, airlines stumble, AI stocks soar: The sectors gaining and losing most from the Iran war

Not for the first time, it’s Britain leading the way in what has been a grim week for the global bond market. Political drama is back, interest rate expectations are rising. But for all the noise, there are limits on how much politics is likely to drive central banks this year.


Britain Leads in Grim Global Bond Week

Global bond markets witnessed a sharp downturn this week, with the UK leading the decline amid rising political uncertainty. Investors reacted to growing fiscal and political concerns, triggering a sell-off in government bonds and pushing yields higher. The turmoil reflects broader instability across global debt markets as traders reassess risk in major economies including the UK.


Britain Leads in Grim Global Bond Week | Bonds Slide As UK Political Storm Brews

The global IPO market is losing momentum. After a brief revival earlier this year, companies across major markets are hitting pause on listing plans. Recent weeks have seen a rise in delays and cautious deal-making, as volatility returns to equity markets.

Global IPO Activity Slows Sharply in April 

The global market rally was triggered after Strait of Hormuz would remain open during a 10-day ceasefire. This is critical, as the route carries nearly 20 percent of global oil supplies.

Global Markets Cheer Hormuz Reopening Announcement

Global markets whipsawed, and the wild gyrations this week reflect how tentative sentiment remains despite Wednesday’s cross-asset, milestone-filled relief rally.


US-Iran Ceasefire: Financial Markets Flip Flop on Truce Fragility

U.S. President Trump’s ceasefire announcement has significantly impacted the energy and market prices.


Global Stocks Soar on Temporary Truce

Global markets are bracing for further escalation after Trump’s deadline ends on April 6. Energy prices have surged sharply since the conflict began.

Crude oil has risen between 40 to 65 percent, now trading well above the 100-dollar-per-barrel mark, while LNG prices have jumped nearly 60 percent.

US-Iran War: Oil, Power, Food Chains Under Pressure

China’s onshore bond market is quickly becoming a major global player, especially for developing economies looking for cost-effective funding. Backed by ample liquidity and a stable currency, it’s emerging as a preferred source of financing for countries across the Global South. 


 China’s Bond Market Attracts Developing Nations Globally 

A month into the Iran war, all financial assets have taken a hit, with the S&P 500 wiping out nearly 2 trillion dollars. Global markets are now expected to extend a month of volatile trading since the war began into April.


S&P 500 Marks Fifth Straight Week of Losses 

As global uncertainties rise, key sectors like artificial intelligence, defence, and healthcare are emerging as major winners in 2026. Increased rearmament, higher military spending, and rapid AI adoption are driving economic growth, while healthcare continues to see strong investment.

AI, Defence, Healthcare: Winners of 2026 | Rearmament Fuels Growth in 2026 

October 2025 witnessed mixed but overall resilient performance across global markets despite ongoing economic uncertainties, including inflation pressures and trade tensions. US equities marked solid gains led by strong tech stocks and early earnings reports, while European and Asian markets faced volatility linked to geopolitical concerns and slowing growth forecasts. 


Global Markets Show Resilience Amid Economic Uncertainty in October 2025  

Once Again, Financial Markets Are Focusing on Politics. By the End of Monday, Three of the "Fiscally Fraught Four" Countries Saw Their Leadership Structures Break Down in the Span of Just Four Days. The Political Uncertainty Led to High Volatility in Global Markets.

Three of 'fiscally fraught four' see leadership change

A pivotal week looms for global markets as investors brace for central bank signals, corporate earnings, and rising geopolitical tensions. From the U.S. Fed’s decision to emerging market volatility, here are the key global cues that could redefine sentiment across asset classes. Take a look.

Global markets face crucial test ahead

Wall Street regained its confidence last week. Speculative assets, like cryptos and tech firms, skyrocketed. Corporate America unleashed billions of dollars' worth of pent-up bond sales. In this report, we look at the epic comeback in global stocks and what to expect in the coming week.

Global markets: Stocks rebound to wipe out losses from April's tariff shock

US President Donald Trump said he plans to start his reciprocal tariff push with "All countries," curbing speculation that he could limit the initial scope of the levies. He said he "Couldn't care less" if firms raise prices in response. Trump, in his second term, is also least worried about the deep sell-off in global markets. Stagflation fears are rising and will constrain the Federal Reserve's ability to cut rates further. A roller-coaster quarter for markets came to an end. But Trump's policies and stagflation fears are driving investors out of riskier assets. European stocks are beating US equities by the most on record. Japanese stocks are in a correction, and gold is at a fresh record high.<o:p></o:p>
<h2 class="MsoNormal">Bets on US recession surge<o:p></o:p></h2>
The US administration is expected to unveil a broad slate of so-called reciprocal tariffs against US trading partners. That is looming as the next potential body blow for markets. Amidst those fears, stagflation emerges as the winning bet. Like-for-like or reciprocal tariffs will hit US trading partners who have enjoyed strong trade surpluses over the years. The US had its largest trade deficit with China at 295.4 billion dollars last year. The next is with the European Union, with America's trade deficit at 235.6 billion dollars in 2024. Followed by Mexico at 171.8 billion dollars and Vietnam at 123.5 billion dollars. The US trade deficit with Ireland and Germany stood at over 80 billion dollars. Taiwan, Japan, South Korea and Canada accounted for over 60 billion dollars. Trade deficit with India, Thailand and Italy were at over 40 billion dollars last year. US deficit with Switzerland stood at a touch below 40 billion dollars in 2024. Comparitively, Malaysia, Indonesia, France, Austria, and Sweden had a smaller deficit with the US, so with Trump calling for reciprocal tariffs, all those countries are likely to face equivalent U.S. import levies.<o:p></o:p>
The countries that are likely to be spared on Trump's so-called 'Liberation Day' are the Netherlands, South and Central America, Hong Kong, Australia, and the United Kingdom. In 2024, America had a trade surplus with those countries.<o:p></o:p>
(With inputs from the agencies)<o:p></o:p>

Business & Economy: Trump, in his second term, is also least worried about the deep sell-off in global markets. Stagflation fears are rising and will constrain the Federal Reserve's ability to cut rates further.

US President Donald Trump said he plans to start his reciprocal tariff push with "All countries," curbing speculation that he could limit the initial scope of the levies. He said he "Couldn't care less" if firms raise prices in response. Trump, in his second term, is also least worried about the deep sell-off in global markets. Stagflation fears are rising and will constrain the Federal Reserve's ability to cut rates further. A roller-coaster quarter for markets came to an end. But Trump's policies and stagflation fears are driving investors out of riskier assets. European stocks are beating US equities by the most on record. Japanese stocks are in a correction, and gold is at a fresh record high. Bets on US recession surge The US administration is expected to unveil a broad slate of so-called reciprocal tariffs against US trading partners. That is looming as the next potential body blow for markets. Amidst those fears, stagflation emerges as the winning bet. Like-for-like or reciprocal tariffs will hit US trading partners who have enjoyed strong trade surpluses over the years. The US had its largest trade deficit with China at 295.4 billion dollars last year. The next is with the European Union, with America's trade deficit at 235.6 billion dollars in 2024. Followed by Mexico at 171.8 billion dollars and Vietnam at 123.5 billion dollars. The US trade deficit with Ireland and Germany stood at over 80 billion dollars. Taiwan, Japan, South Korea and Canada accounted for over 60 billion dollars. Trade deficit with India, Thailand and Italy were at over 40 billion dollars last year. US deficit with Switzerland stood at a touch below 40 billion dollars in 2024. Comparitively, Malaysia, Indonesia, France, Austria, and Sweden had a smaller deficit with the US, so with Trump calling for reciprocal tariffs, all those countries are likely to face equivalent U.S. import levies. The countries that are likely to be spared on Trump's so-called 'Liberation Day' are the Netherlands, South and Central America, Hong Kong, Australia, and the United Kingdom. In 2024, America had a trade surplus with those countries. (With inputs from the agencies)

US stagflation fears rise ahead of tariff hit

US stock markets plunged on Monday as a mix of trade tensions, economic uncertainty, and the threat of a looming federal government shutdown drove investors into a panic. The steep selloff that started last week gathered pace, with the three main indexes experiencing huge losses.&nbsp;
The S&amp;P 500 has fallen over 8 per cent from its February 19 all-time high, while the Nasdaq Composite has entered formal correction territory after falling more than 10 per cent from its high in December. The selling tide has wiped out trillions of dollars of market capitalisation, fuelling concern for a global economic downturn.
A combination of factors has contributed to the market's weakening, such as high stock valuations, changing trade policy, and lacklustre corporate earnings. The uncertainties caused by tariff disagreements with Canada, Mexico, and Europe are prompting business leaders to revisit their strategic frame of mind, says Peter Orszag, CEO of Lazard. Investors have reacted by retreating from equities, resulting in indiscriminate losses for most sectors.
The market decline has erased considerable value, with the S&amp;P 500 declining more than 8.6 per cent from its February peak, representing a loss of over $4 trillion in market cap. The Nasdaq Composite's greater than 10 per cent drop from its December peak highlights the sharp volatility engulfing the markets.
Technology shares have been among the hardest hit during the recent selloff. Tesla's value dropped by over $125 billion in a single day, with Apple and Nvidia losing about 5 per cent each. The broader S&amp;P 500 technology sector also fell 4.3 per cent. Other sectors have not been spared either; the stock of Delta Air Lines fell by 14 per cent following the company's decision to cut its profit forecasts for the first quarter in half, due to fear of economic conditions.
<h2>Volatility surges on recession fears</h2>
Investor nervousness about a recession has also picked up. In a recent interview, when asked if he foresaw a recession this year, US President Donald Trump admitted that the economy was experiencing a "period of transition" but declined to make a categorical forecast. Ross Mayfield, an investment strategist at Baird, observed that the administration seems to be prepared to tolerate short-term economic discomfort to realise its longer-term policy objectives.
Despite the market upheaval, the White House has kept resisting recession fears, insisting that economic fundamentals are strong. White House National Economic Council Director Kevin Hassett said that although there are short-term blips in economic figures, there are still grounds for optimism in the economy's future. He also stated that trade uncertainties would soon be resolved and that tax cuts would yield long-term gains in investment and wages. However, few investors are optimistic, as sustained volatility reflects sustained nervousness.
Soon, investors will be closely watching a few key indicators that may affect market stability, including future inflation readings, Federal Reserve interest rate determinations, and any government efforts to stabilise the economy. Investment analyst Dan Coatsworth stated that worries regarding high stock valuations have been building for quite some time now, with numerous market participants predicting a correction. As market volatility persists, investors are urged to stay up to date and think about diversification plans to contain risks.
With uncertainty hanging over financial markets, everyone waits with bated breath for the coming economic data and government policy decisions to decide whether this decline is a temporary dip or the beginning of a more extended economic downturn.
(With inputs from agencies)

Business & Economy: The market decline has erased considerable value, with the S&P 500 declining more than 8.6 per cent from its February peak, representing a loss of over $4 trillion in market cap.

US stock markets plunged on Monday as a mix of trade tensions, economic uncertainty, and the threat of a looming federal government shutdown drove investors into a panic. The steep selloff that started last week gathered pace, with the three main indexes experiencing huge losses. The S&P 500 has fallen over 8 per cent from its February 19 all-time high, while the Nasdaq Composite has entered formal correction territory after falling more than 10 per cent from its high in December. The selling tide has wiped out trillions of dollars of market capitalisation, fuelling concern for a global economic downturn. A combination of factors has contributed to the market's weakening, such as high stock valuations, changing trade policy, and lacklustre corporate earnings. The uncertainties caused by tariff disagreements with Canada, Mexico, and Europe are prompting business leaders to revisit their strategic frame of mind, says Peter Orszag, CEO of Lazard. Investors have reacted by retreating from equities, resulting in indiscriminate losses for most sectors. The market decline has erased considerable value, with the S&P 500 declining more than 8.6 per cent from its February peak, representing a loss of over $4 trillion in market cap. The Nasdaq Composite's greater than 10 per cent drop from its December peak highlights the sharp volatility engulfing the markets. Technology shares have been among the hardest hit during the recent selloff. Tesla's value dropped by over $125 billion in a single day, with Apple and Nvidia losing about 5 per cent each. The broader S&P 500 technology sector also fell 4.3 per cent. Other sectors have not been spared either; the stock of Delta Air Lines fell by 14 per cent following the company's decision to cut its profit forecasts for the first quarter in half, due to fear of economic conditions. Volatility surges on recession fears Investor nervousness about a recession has also picked up. In a recent interview, when asked if he foresaw a recession this year, US President Donald Trump admitted that the economy was experiencing a "period of transition" but declined to make a categorical forecast. Ross Mayfield, an investment strategist at Baird, observed that the administration seems to be prepared to tolerate short-term economic discomfort to realise its longer-term policy objectives. Despite the market upheaval, the White House has kept resisting recession fears, insisting that economic fundamentals are strong. White House National Economic Council Director Kevin Hassett said that although there are short-term blips in economic figures, there are still grounds for optimism in the economy's future. He also stated that trade uncertainties would soon be resolved and that tax cuts would yield long-term gains in investment and wages. However, few investors are optimistic, as sustained volatility reflects sustained nervousness. Soon, investors will be closely watching a few key indicators that may affect market stability, including future inflation readings, Federal Reserve interest rate determinations, and any government efforts to stabilise the economy. Investment analyst Dan Coatsworth stated that worries regarding high stock valuations have been building for quite some time now, with numerous market participants predicting a correction. As market volatility persists, investors are urged to stay up to date and think about diversification plans to contain risks. With uncertainty hanging over financial markets, everyone waits with bated breath for the coming economic data and government policy decisions to decide whether this decline is a temporary dip or the beginning of a more extended economic downturn. (With inputs from agencies)

US stock markets crash amid recession fears and trade uncertainty

The confidence in inflation that the Federal Reserve had last year has dramatically changed to caution this year. Is US President Donald Trump's trade war truly going to change the game when it comes to inflation? They certainly aren't helping.<o:p></o:p>
It's been a tough start to 2025, with financial markets in chaos on Trump 2.0 policies. Since Trump took over as the US president, his executive orders have ignited jitters across global assets.<o:p></o:p>
<h2>Trade war jitters and inflation in spotlight </h2>
Trump's tariff threats have complicated the Federal Reserve's rate-cut cycle. Just a few months ago, the fed enjoyed a rare moment of confidence. Inflation was becoming more predictable, giving officials the much-needed courage to start cutting rates. That confidence has, unsurprisingly, diminished. Stickier inflation numbers and tariff threats have prematurely put the brakes on the Fed's ambitions to get interest rates back to neutral. But for all the hype, are tariffs really a big deal for inflation? A new report from the Boston Fed concludes that tariffs would have added less than a percentage point to core inflation. That is not big in the scheme of things. But as the fed paper makes clear, it really comes down to how firms respond. Small changes to retail margins can make a surprisingly big difference. Are firms still well-positioned to pass on the full costs of higher tariffs? Consumer spending still looks decent, and presumably, this week's retail sales figures should show a boost as shoppers have front-run tariffs.&nbsp;Away from tariffs, any good US inflation news will boost investor sentiment. Rents have been a major driver of core inflation for a long time now. However, rents have been falling. None of this is to say inflation won't remain elevated this year. Still, it's far from clear how inflationary the president's plans on tariffs and migration will end up. US Inflation will make early headlines this week, with the risk of higher prints for both headline and core measures.&nbsp;Food prices - egg prices in particular - and energy costs have been rising while vehicle prices are grinding higher and housing costs remain sticky. Inflation is likely to remain elevated, and the Fed is unlikely to cut rates before June. Over in Europe, policymakers face a different challenge: higher natural gas prices. Headline inflation is creeping higher, and European surveys on selling prices have started to rise again. Still, none of this seems to faze the European Central Bank, unlike the Fed. But listening to the Bank of England last week, it's clear that the ghosts of the 2022 gas price shock are still haunting officials.&nbsp;Still, trump's ability to surprise markets with new announcements on a multitude of topics will continue to keep participants on edge this week too.
&nbsp;
(With the inputs from the agencies)<o:p></o:p>

Business & Economy: The confidence in inflation that the Federal Reserve had last year has dramatically changed to caution this year. Is US President Donald Trump's trade war truly going to change the game when it comes to inflation?

The confidence in inflation that the Federal Reserve had last year has dramatically changed to caution this year. Is US President Donald Trump's trade war truly going to change the game when it comes to inflation? They certainly aren't helping. It's been a tough start to 2025, with financial markets in chaos on Trump 2.0 policies. Since Trump took over as the US president, his executive orders have ignited jitters across global assets. Trade war jitters and inflation in spotlight Trump's tariff threats have complicated the Federal Reserve's rate-cut cycle. Just a few months ago, the fed enjoyed a rare moment of confidence. Inflation was becoming more predictable, giving officials the much-needed courage to start cutting rates. That confidence has, unsurprisingly, diminished. Stickier inflation numbers and tariff threats have prematurely put the brakes on the Fed's ambitions to get interest rates back to neutral. But for all the hype, are tariffs really a big deal for inflation? A new report from the Boston Fed concludes that tariffs would have added less than a percentage point to core inflation. That is not big in the scheme of things. But as the fed paper makes clear, it really comes down to how firms respond. Small changes to retail margins can make a surprisingly big difference. Are firms still well-positioned to pass on the full costs of higher tariffs? Consumer spending still looks decent, and presumably, this week's retail sales figures should show a boost as shoppers have front-run tariffs. Away from tariffs, any good US inflation news will boost investor sentiment. Rents have been a major driver of core inflation for a long time now. However, rents have been falling. None of this is to say inflation won't remain elevated this year. Still, it's far from clear how inflationary the president's plans on tariffs and migration will end up. US Inflation will make early headlines this week, with the risk of higher prints for both headline and core measures. Food prices - egg prices in particular - and energy costs have been rising while vehicle prices are grinding higher and housing costs remain sticky. Inflation is likely to remain elevated, and the Fed is unlikely to cut rates before June. Over in Europe, policymakers face a different challenge: higher natural gas prices. Headline inflation is creeping higher, and European surveys on selling prices have started to rise again. Still, none of this seems to faze the European Central Bank, unlike the Fed. But listening to the Bank of England last week, it's clear that the ghosts of the 2022 gas price shock are still haunting officials. Still, trump's ability to surprise markets with new announcements on a multitude of topics will continue to keep participants on edge this week too. (With the inputs from the agencies)

Cues to watch in the week ahead

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