Now, the market is its own biggest enemy.
Under concerns about tariffs, global markets are experiencing widespread selling and are collapsing before our eyes.
- The Hang Seng Index fell 8%, the Shanghai Composite Index dropped 4%; the Japanese stock market briefly plunged 8% before narrowing its losses;
- After gold fell below $3000, it surged again by $50, returning above $3000.
- After the dollar index opened lower, it nearly recovered all its losses.
1. The details of gold and the dollar during the session are very important; first, they fell, then recovered losses, and finally formed a trend of simultaneous rises in gold, the dollar, and U.S. bonds—demonstrating that the crisis is deepening further.
2. The root cause of this global market crash is Trump's firm stance on tariffs, which has not wavered due to the market's decline, leading to further drops afterward. It is precisely because of Trump's resolute attitude that the stock market has 'enough space' to continue falling, without accounting for the worst-case scenario. In the past, tariffs were seen as a means to an end, but now tariffs themselves are viewed as the goal.
3. If some small-scale agreements are reached, this round of selling is expected to ease. Vietnam proposed to eliminate all tariffs on American goods, but Trump's trade advisor said it is not enough.
4. The current speculation theme in financial markets is 'economic recession.' JPMorgan is the first major Wall Street bank to predict that the U.S. will fall into recession in 2025. If the economy falls into recession, the U.S. stock market may decline further. Since 1948, the average pullback of the S&P 500 during recessions has been 22.1%. Based on this calculation, it would push the S&P 500 below 4800 points (on Monday, S&P 500 futures briefly fell to 4801 levels).
Last Sunday, when asked about the market decline, Trump said, 'Sometimes you have to take medicine,' and added that he did not intentionally cause the market to crash.
