WASHINGTON, April 6:— Fears of a U.S. recession deepened this week as investors reacted sharply to President Donald Trump’s sweeping tariffs, which have erased nearly $5 trillion from U.S. stock markets in just two days and over $9 trillion since his inauguration.
The Nasdaq officially entered bear market territory, dropping more than 20% from its record high, while commodity prices, including oil, continued their downward slide. Investors have flocked to the safety of government bonds amid mounting economic uncertainty.
JP Morgan, in a note to investors, predicted that the U.S. economy is likely to enter a recession this year, stating that the country’s GDP is expected to shrink “under the weight of the tariffs.”
Adding to the turmoil, China has imposed an additional 34% duty on U.S. goods, intensifying a trade war that has led to global stock market declines not seen since the early months of the pandemic.
In India, stock indices have fallen by 2,100 points this week. Still, brokerage firm Jefferies issued a relatively optimistic view, stating that key Indian export sectors such as IT services, pharmaceuticals, and automobiles are not directly affected by the new U.S. tariff regime.
Jefferies called the 26% tariff on Indian goods “reasonable” when compared to rates imposed on other countries, but warned of indirect fallout. “A slowdown in the U.S. economy may still hurt Indian exports, particularly in IT,” the firm noted.
Ajay Bagga, a banking and market expert, said the U.S. market cap loss now exceeds $9 trillion. “US imports are worth $3.3 trillion. Even if tariffs are applied to all, revenues would max out at $600 billion. But higher import costs will reduce demand and shrink volumes, so even that target is unlikely. Meanwhile, the $9 trillion market loss is real,” he said.
ASK Private Wealth, in its market outlook, warned the tariffs could usher in stagflation in the U.S., citing the risk of high inflation alongside stagnating growth. “Impact: Higher uncertainty; chances of retaliation and rollback,” the report noted.
Economists have cautioned that the tit-for-tat tariffs risk creating a global environment of trade isolation not seen since the 19th century, raising barriers that could disrupt supply chains and investment flows worldwide.
