Global stock markets experienced a sharp decline as concerns over U.S. tariffs intensified, with S&P 500 futures pointing to a 1% loss on the final trading day of a challenging quarter. The uncertainty drove investors toward safe-haven assets, pushing gold to a new all-time high and fueling a rally in U.S. Treasuries.
Nasdaq 100 futures dropped 1.4%, with premarket trading showing significant losses for major stocks such as Palantir Technologies Inc. and Tesla Inc., both of which fell by more than 4.5%. Airline stocks also faced pressure after Virgin Atlantic Airways Ltd. reported weakening ticket sales for U.S. outbound flights, indicating a more cautious approach to international travel among American consumers.
The downward momentum extended beyond the U.S., with European and Asian stock markets also experiencing declines. The Stoxx 600, a key European equity benchmark, fell nearly 2%. Meanwhile, Japan’s Nikkei 225 index tumbled 4.1%, officially entering correction territory as exporter and semiconductor stocks suffered steep losses.
Monday’s selloff was broad-based, reflecting investor anxiety following a rough quarter that saw the S&P 500 fall 5.1%—its worst three-month performance since 2022. Adding to the pessimism, Wall Street strategists continued revising their forecasts downward.
Goldman Sachs’ David Kostin cut his year-end target for the S&P 500 for the second time this month, now projecting the index will finish at 5,700, down from his previous estimate of 6,200. His new outlook suggests only a modest 2% gain from Friday’s closing level and ranks among the most bearish projections on Wall Street, according to Bloomberg data.
“The market is grappling with significant uncertainty surrounding tariffs,” said Jefferies strategist Mohit Kumar. “The worst-case scenario would be that April 2 is just the beginning of prolonged negotiations, leaving investors with little clarity on how tariffs will be structured.”
Former President Donald Trump’s push for reciprocal tariffs is set to begin on April 2, and the potential economic fallout remains a major concern. Depending on the scope of the proposed measures, Bloomberg Economics estimates that U.S. GDP could contract by 4% over the next two to three years, with inflation rising by approximately 2.5%.
Beyond trade concerns, geopolitical tensions further unsettled markets. According to NBC News, the U.S. president has threatened to impose restrictions on all Russian oil exports if Moscow refuses to agree to a ceasefire with Ukraine. This contributed to a 0.7% increase in Brent crude futures.
Investor speculation is also growing over how central banks might respond to the economic uncertainty. Expectations are rising that an escalation in trade conflicts could prompt additional interest rate cuts from both the Federal Reserve and the European Central Bank.
On Monday, U.S. Treasury yields reflected this shifting sentiment, with the 10-year yield falling by six basis points to around 4.19%, while German Bund yields declined by approximately three basis points.
Treasuries have outperformed equities this quarter, with government bonds delivering gains of more than 2.5%. This marks the first time since the onset of the COVID-19 pandemic in March 2020 that Treasuries have seen such an advantage over stocks. Jamie Niven, senior portfolio manager at Candriam, suggested that 10-year U.S. yields could dip below 4% as early as this week.
“Markets are beginning to price in the downside risks to equities, which are increasingly seen as tied to recession fears. As a result, Treasuries are benefiting from a flight to safety,” he explained.
Meanwhile, gold prices soared to a record high, surpassing $3,100 per ounce. The surge in demand for the precious metal has led to an 18% increase in its value so far this year, reflecting heightened investor concerns and the search for stable assets amid economic and geopolitical uncertainties.
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