Nikkei Plunges 8% Amid Growing Concerns Over Global Trade Tensions

Asian stocks fell on Monday, as the prospect of a trade war sparked Wall Street futures dive, and investors bet on the growing possibility of a recession that could be a sign of U.S. interest rates cut in the first week of May.

The markets for futures quickly moved to estimate five quarter-point cut on U.S. rates this year and pushed Treasury yields to a tepid level and putting pressure on the dollar.

The calamity occurred in the midst of White House officials showed no hint of abstention from the sweeping tariffs they have proposed and China said that markets had spoken for the retaliation of China through taxes against U.S. goods.

The president Donald Trump told reporters that markets must be patient and that Trump said he will not sign any deal to China as long as that the U.S. trade deficit was eliminated.

Investors had hoped that about the loss of billions of wealth and the potential economic blow could make Trump think twice about his strategy.

"The size and disruptive impact of U.S. trade policies, if sustained, would be sufficient to tip a still healthy U.S. and global expansion into recession," said Bruce Kasman, head of economics at JPMorgan placing the probability of a recession as high as 60 60%.

"We continue to expect a first Fed easing in June," he said. "However, we now think the Committee cuts at every meeting through January, bringing the top of the funds rate target tariff range down to 3.0%."

S&P 500 futures fell 4.31 percent in volatile trade as Nasdaq futures plunged 5.45 percent, which added to the nearly $6 trillion market loss.

Japan's Nikkei dropped 7.8 percent to the lowest levels seen in the latter half of 2023 and South Korea lost 4.6%.