Markets Plunge Amid Recession Fears

Global stock markets continued to plummet on Tuesday, with Asian and European markets following Wall Street's lead, amid growing fears that a wide-ranging trade war could dent US economic growth and result in a recession. The Dow Jones dropped 2%, the S&P 500 fell 2.7%, and the tech-heavy Nasdaq dropped 4% on Monday, with Tesla's shares experiencing their worst day since September 2020, falling 15%.

In Asia, stocks took a hit on Tuesday, with Japan's Nikkei and Taiwan stocks sliding about 3%, hitting their lowest level since September. MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 1%. Even Chinese stocks, which have been on a tear this year, were not immune to the downbeat mood, with the blue-chip index falling about 1%, while Hong Kong's Hang Seng Index was 1.5% lower.

European futures also pointed to a lower open, with DAX futures down 0.8% and Eurostoxx futures 0.9% lower, suggesting the selloff had more room to go. The fall came a day after President Trump skirted around questions about a potential recession on Sunday, saying there was a "period of transition" due to his trade policies.

Kevin Hassett, the head of the national economic council, told CNBC on Monday that any uncertainty around Trump's trade policies would be resolved by early April and that the policies were "creating jobs in the US". Hassett cited recent job figures that showed an increase of 10,000 manufacturing jobs in February, but this represents only a 0.08% increase in manufacturing jobs.

Despite the administration's efforts to allay concerns, the Atlanta Federal Reserve's GDP Now tracker is suggesting the economy could contract in the first three months of the year, largely due to an outsized drag from net trade. Trump has repeatedly denied that his trade policies have caused uncertainty, and his commerce secretary, Howard Lutnick, told NBC's Meet the Press that "there's going to be no recession in America".