Stock markets around the globe tumbled Monday following President Donald Trump’s tweets that appeared to jeopardize talks and escalate trade tensions with China. The twin tweets immediately threw the market into chaos, setting aside the calmness that had seen equities push towards new all-time highs last week.
In his tweets, president Trump threatened an increase in tariff rates on the $200 billion worth of Chinese goods, from 10 percent to 25 percent. He also indicated another $325 billion in goods from China would face 25 percent tariffs in coming days.
On Monday, U.S. stock futures declined sharply as the S&P 500 Index and Dow Jones Industrial Average continued to falter. In New York, S&P 500 and Dow Jones saw contracts slip 2.1 percent, while the Nasdaq 100 Index futures dropped 2.3 percent.
The declines contrasted Friday’s postings where major equity benchmarks had closed within touch of all-time highs on the back of a strong jobs report and an earlier 3.2 percent growth in the economy.
In the Asia Pacific, stock markets too tumbled, with major markets taking hits of more than 5 percent on Monday
Mainland Chinese markets declined in the morning session, with the Shanghai composite and Shenzhen composite plunging by over 5 percent. The same drop was registered at the Shenzhen component.
Hong Kong’s Hang Seng index declined 3.31 percent, with shares of ZTE plummeting by more than 10 percent. The Chinese telecommunications giant’s stock on the Shenzhen composite fell 8.62 percent.
In Australia, the ASX 200 tumbled 0.9 percent, with the effect felt in almost all sectors including the currencies as the Australian dollar declined.
Although markets in both Japan and South Korea remain closed on Monday, with Japan’s holiday ending on Tuesday, the Nikkei 225 futures still fell 2.3 percent at 21,965.
The Chinese yuan also dropped, hitting its worst levels in almost two years. However, the Japanese yen was steady against the U.S. dollar.
Also to be affected were oil prices, which plunged in tandem with market trends in the region. Meanwhile, reports indicate that China could cancel its participation in this week’s trade talks set for Washington as a result of Trump’s threats.