Stock markets plunge on US recession fears

European and Asian stock markets diverged on Tuesday after a sharp sell-off on Wall Street fueled by fears about the US economy as President Donald Trump presses ahead with steep tariffs.

- Agence France-Presse

NEW YORK:

Traders had initially welcomed Trump's election win in late 2024, optimistic that his promised tax cuts and deregulation would boost the world's biggest economy and help equities push to further record highs. But there is now a growing pessimism that a recession could be on the cards amid warnings that tariffs imposed on key trading partners will reignite inflation, forcing the Federal Reserve to again start raising interest rates.

"Markets are jittery and volatility seems like the only certainty while the White House pushes hard to usher in a new era, seemingly happy for stock markets to be collateral damage," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

The president's weekend comments that the economy was facing "a period of transition" and his refusal to rule out a recession did little to soothe investor worries.