FTSE 100 plunges to one-year low amid market turmoil, as Goldman Sachs raises chances of US recession to 45% – business live​on April 7, 2025 at 11:29 am

In percentage and points terms, this morning’s 6% plunge would be the worst day for the FTSE 100 since March 2020, when markets crashed early in the Covid-19 pandemic.

Britain’s stock market has plunged deep into the red at the start of trading.

Stocks are sliding sharply again, adding to last week’s heavy losses, as investors grow more fearful that Donald Trump’s trade policies will lead to recession.

In London, the FTSE 100 index of blue-chip stocks has plunged by 488 points, or 6%, taking the index down to 7566 points, its lowest level since February 2024.

That’s an even more severe plunge than the near-5% wipeout on Friday after China retaliated against the US with its own new tariffs.

Every share on the FTSE 100 is in the red, with UK manufacturing firm Rolls–Royce tumbling by 13%.

Miners, banks, and investment firms are also in the top fallers.

There is widespread disappointment this morning that there was no progress on US trade tariffs over the weekend, with Trump described his new tariffs as necessary ‘medicine’.

Kathleen Brooks, research director at XTB, says investors are desperate to see ‘concrete action’, such as a pause or u-turn on Trump’s tariffs.

This market is looking for concrete action, not talk of action. The best panacea for financial markets right now would be a pause or reversal from the US on its tariff programme.

Australia’s stock market has recorded its worst session since the Covid-19 pandemic rattled markets five years ago.

The S&P/ASX 200 index has closed down 4.2%, and is now almost 15% off its all-time high set in February.

“Rarely if ever have the next few days been so important,” Deutsche Bank warned clients this morning.

In a new research note, Deutsche point out that the shock since “Liberation Day” last Wednesday has led to the fourth worst two-day market slump since the second world war – with only the 1987 crash, the Great Financial Crisis of 2008 and the initial Covid panic seeing worse back-to-back days.

Deutsche warn that the disruption is the biggest since Richard Nixon took America off the gold standard in 1971:

It represents the biggest shock to the global trading system since the Bretton Woods collapse in 1971 and will represent the largest tax increase for the US consumer since the 1968 Revenue and Expenditure Control Act that came during the Vietnam War.

It’s hard to say we weren’t warned though. Trump has been pretty clear as to his views on tariffs for years, if not decades, and his actions and words pre and post inauguration have been quite clear, as have those of his Administration.

However the scale of the “Liberation Day” tariffs exceeded expectations, and the arbitrary way they were calibrated was a major shock and creates a significant credibility issue which is just as unsettling to global markets as the action itself.

Deutsche add that it is important to watch whether the US Administration tries to find “an elegant off-ramp or doubles down” on its trade policy, Deutsche add:

This is crucial as it will dictate more things than just trade. It will impact the whole relationship between the US and the RoW [rest of the world] in everything that is important, including defence, geopolitics and the multi-lateral rules-based world order. So where trade goes from here will influence everything else.

A US Administration that doubles down will have immense global implications for 2025 and the years and decades ahead. At the moment there are few signs they are backing down which will likely signal more market turmoil ahead. Rarely if ever have the next few days been so important.

Overnight, billionaire investor Bill Ackman urged Donald Trump to pause his new global tariffs, warning.

Ackman, who supported Trump during last year’s presidential race, posted on X that it would be “economic nuclear war” for the US to impose its new retaliatory tariffs on many trading partners on 9 April, as planned.

In a sign of Wall Street’s deep, growing anxiety about the trade war, Ackman says:

But, by placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital.

The president has an opportunity to call a 90-day time out, negotiate and resolve unfair asymmetric tariff deals, and induce trillions of dollars of new investment in our country.

Ackman also alleged that US Commerce secretary Howard Lutnick was conflicted because of his relationship with financial services firm Cantor Fitzgerald, due to its exposure to the bond market (where price have been rising in the market crisis).

Ackman claimed:

I just figured out why @howardlutnick is indifferent to the stock market and the economy crashing. He and Cantor are long bonds. He profits when our economy implodes.

It’s a bad idea to pick a Secretary of Commerce whose firm is levered long fixed income. It’s an irreconcilable conflict of interest.

Lutnick stepped down as chairman and CEO of Cantor Fitzgerald when he was confirmed as Commerce secretary, with two of his sons taking top positions at the firm.

European stock markets are heading for fresh heavy losses when bourses open in an hour’s time, following the slump in Asia-Pacific markets today.

The Eurostoxx 50 index, of Europe’s 50 largest companies, is on track to fall round 4%. The futures market also indicates the UK’s main share index, the FTSE100, could fall 2% at the open, at 8am.

Wall Street is also on track for another rout.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, has the details:

Wherever we look this morning, it’s a bloodbath. The S&P500 is down by almost 4% at the time of writing, Nasdaq futures are down by more than 4%, same for the European futures and the week hasn’t even started yet

For those just catching up with today’s rout of Asian financial markets, here’s a recap of the continuing fallout from Donald Trump’s sweeping tariffs amid fears of an escalating global trade war and a potential US recession.

• The US president said foreign governments would have to pay “a lot of money” to lift tariffs that he characterised as “medicine” as markets in Asia plunged in early trading on Monday, continuing a two-day sell off that wiped almost $5tn off the value of global stock markets last week. Trump indicated he was not concerned about the market losses, telling reporters late on Sunday: “I don’t want anything to go down. But sometimes you have to take medicine to fix something.”

• Japan’s benchmark Nikkei 225 index tumbled nearly 9% as concerns over a tariff-induced global recession continued to rip through markets on Monday, reaching 30,792.74 for the first time since October 2023. Prime minister Shigeru Ishiba said his government would continue to ask Trump to lower tariffs but that results “won’t come overnight”.

• Hong Kong and Chinese stocks dived, with Hong Kong’s Hang Seng index down 8% in early trade. Shares in Chinese tech giants Alibaba and Tencent fell more than 8%.

• Taiwan’s stock exchange fell almost 10% on the Monday open, the first day of trading since the tariffs were announced. The drop marked the largest one-day point and percentage loss on record, according to local media.

• Trading on South Korea’s Kospi index was halted for five minutes as stocks plummeted.

• Australian shares were also sharply lower, with more than $160bn wiped off the markets in early trading.

• The US president said he had spoken to leaders from Europe and Asia over the weekend, who hope to convince him to lower tariffs that are as high as 50% and due to take effect this week. “They are coming to the table. They want to talk but there’s no talk unless they pay us a lot of money on a yearly basis,” Trump said.

• Trump’s tariff announcement last week jolted economies around the world, triggering retaliatory levies from China. Wall Street stock futures opened sharply lower on Sunday, in a sign of further turbulence after the worst week for US stocks since the onset of the Covid-19 crisis five years ago.

• Treasury secretary Scott Bessent said more than 50 nations had started negotiations with the US since last Wednesday’s tariffs announcement.
  – With reporting by Helen Davidson and agencies

Donald Trump’s tariff measures could slow euro area economic growth by between 0.5 and 1 percentage points, the Greek central bank governor has told the Financial Times in an interview published on Monday

Yannis Stournaras’s comments come against the backdrop of European Union countries weighing approval of a first set of targeted countermeasures on up to $28bn of US imports from dental floss to diamonds in the coming days, Reuters reports.

The 27-nation bloc faces 25% import tariffs on steel and aluminium and cars and reciprocal tariffs of 20% from Wednesday for almost all other goods.

In an interview with the newspaper, Stournaras warned that the looming global trade war risk sparking a large “negative demand shock” in the Eurozone that could weigh heavily on Europe’s economic growth.

He told the FT:

A notable adverse impact on growth could lead to activity being much weaker than expected, dragging inflation below our targets.

The European Central Bank has estimated that a blanket U.S. tariff of 25% on European imports would lower euro zone growth by 0.3 percentage points in the first year. EU counter-tariffs on the US would raise this to half a percentage point.

Donald Trump has said he won’t back down on his sweeping tariffs on imports from most of the world unless countries even out their trade with the US, digging in on his plans to implement the levies that have sent financial markets reeling and raised fears of a recession.

Here’s video footage of the US president telling media he doesn’t want global markets to fall but also that he isn’t concerned about the huge sell-off, and “sometimes you have to take medicine to fix something”.

Howmet Aerospace, which supplies parts for planes built by Airbus and Boeing, may halt some shipments if they are impacted by Donald Trump’s tariffs, according to a letter seen by Reuters.

The Pittsburgh-based Howmet said in the letter to customers that it had declared a force majeure event – a legal practice that allows parties to a contract to avoid their obligations if hit by unavoidable and unpredictable external circumstances.

The news agency quoted the company as writing in the letter: “Howmet will be excused from supplying any products or services that are impacted by this declared national emergency and/or the tariff executive order.”

Howmet declined to comment.

Howmet is a supplier of critical metal components used across the $150bn jetliner industry.

Boeing and Airbus did not immediately reply to Reuters’ requests for comment on the letter, which three industry sources said went to multiple firms across the aerospace sector.

It appeared to be the first such manoeuvre by a major aerospace company since the tariff announcement, one of the sources said.

In the UK, Keir Starmer has said he wants to shelter Britain from the storm of Donald Trump’s escalating trade wars.

Governments the world over are considering how best to respond to the turmoil unleashed on the global economy by the US president last week – and so far Britain has taken a measured approach, writes Richard Partington.

That approach contrasts with the promises of retaliation from the European Union, China and Canada.

For the British prime minister, however, there are tough economic and political considerations to weigh up.

Click here for Partington’s report outlining the case for retaliation and the benefits of appeasement:

India’s stock markets were among those that plunged on Monday morning in response to Trump’s tariffs and the wider volatility they have triggered across Asian markets.

India’s BSE’s 30-share Sensex plunged 5.19% while the broader Nifty tumbled 5%.

Analysts said that the escalating global trade war had unsettled Indian investors and intensified fears of an economic downturn impacting India.

However, India found itself less rattled than other Asian countries after the announcement it would now face a 27% tariff on all goods brought into the US. Exports to the US represent just 2% of India’s GDP, meaning that while certain industrial sectors will take a hit, it’s unlikely to trigger a wider recession.

As a country of 1.4 billion people, the Indian market itself is also huge and so industries could pivot to selling domestically.

The exemption of two of India’s biggest exports – pharmaceuticals and energy – from tariffs has also softened the blow.

Some analysts even presented the situation as a distinct advantage for India over its biggest manufacturing competitors such as China, Vietnam and Bangladesh which have been slapped with much higher tariffs by Trump.

There is a suggestion that phone companies such as Samsung and Apple might move more production to India, over China and Vietnam, to take advantage of lower tariffs. It could also help India overtake Bangladesh’s dominance over the garment sector.