Stocks Extend Losses With Deepening Tariff Fears

Global stock markets tumbled, with S&P 500 futures heading for a 1% loss on the final day of a bruising quarter, on intensifying worries about the impact of US tariffs. Gold topped a record and Treasuries rallied, Bloomberg reported.

Nasdaq 100 contracts dropped 1.4%. Nvidia Corp., Palantir Technologies Inc. and Tesla Inc. sank more than 3% in premarket trading. Europe’s Stoxx 600 index slid 1.2% and Asian stocks suffered sharp losses, with the Japan’s Nikkei 225 index losing 4% and Taiwan’s stock index falling into a correction.

The risk that tariffs will hurt the global economy has propelled the S&P 500 to a 5.1% plunge in the first quarter, which would be the worst since 2022, and wiped about $5 trillion off the value of US equities since late February.

Goldman Sachs Group Inc.’s David Kostin cut his S&P 500 target for a second time this month. He expects the benchmark to end the year around 5,700 points versus his previous estimate of 6,200, citing a higher recession risk and tariff-related uncertainty.

“It’s all about the tariff uncertainty,” Jefferies strategist Mohit Kumar said. “The negative scenario for the market would be that April 2 just marks the starting point of negotiation, and we have an extended period of negotiations where there is not much clarity on the tariff structure.”

Depending on the scale of what’s announced, Bloomberg Economics sees scope for a 4% hit to US GDP over a two- to three-year period, alongside a 2.5% increase in prices.

Trump’s reciprocal tariff push is set to begin on April 2. In comments reported by NBC News, the US president also threatened curbs on “all oil coming out of Russia.”

Speculation is also increasing that the trade war will spur more interest-rate cuts at the Federal Reserve and the European Central Bank. Ten-year Treasuries dropped six basis points to about 4.18% on Monday, while Bund yields fell three basis points.

Treasuries are on track to outperform stocks this quarter for the first time since the pandemic onset in March 2020.

Jamie Niven, senior portfolio manager at Candriam, said 10-year US rates may slide below 4% as early as this week. “What’s changed is that markets are now starting to price the downside in risk assets as a recession risk and therefore Treasures rally,” he added.