S&P 500 falls into correction as Trump tariff fears rattle stock markets

Global stock markets were a sea of red Monday, with the S&P 500 falling into correction territory, ahead of a wave of US tariffs this week that have fueled recession fears.

Tokyo plunged more than four percent, leading losses across global stock markets as uncertainty over US President Donald Trump’s latest tariff announcements due on his “Liberation Day” on Wednesday eroded sentiment.

“There is an air of capitulation in financial markets ahead of the April 2nd reciprocal tariff announcement from the US,” says  Kathleen Brooks, research director at XTB.

The S&P 500 fell into correction territory — a drop of at least 10% from a recent peak. The S&P 500 set a record high just last month as investors still viewed Trump tariff threats as a negotiating tactic.

But as it has become clear Trump intends to go through with imposing massive tariffs on major US trading partners, concerns about their inflationary impact and the possibility they may trigger a recession have mounted.

Adding to fears, Trump said Sunday that tariffs would apply to “all countries,” not just those with the largest trade imbalances with the United States.