Bloodbath for European markets as stocks see worst fall since March 2020

The market carnage triggered by Donald Trump's trade tariffs continued at full speed on Monday, following three consecutive days of steep losses, with no sign of the bleeding stopping.

European equity markets are experiencing their worst session since the outbreak of the COVID-19 pandemic in March 2020, as investors continue to flee from risky assets.

The Euro STOXX 50 fell 6% by 10:00 CEST, bringing its losses over the past three sessions to 14%. The broader STOXX 600 dropped 5.7%, extending its post-tariff announcement decline to 13%. The German DAX sank 7.2%, marking its most severe session since 12 March 2020, while Italy’s FTSE MIB fell 6.5% and Spain’s IBEX 35 lost 6%.

The sell-offs followed an equally dramatic rout in Asia. Hong Kong’s Hang Seng Index plummeted 13% overnight — its worst one-day drop since the 1997 handover — while Japan’s Nikkei fell 8.6% and Shanghai’s Composite dropped 7%.

US equity futures also pointed to a deepening downturn, with S&P 500 contracts down 3.8%, Dow Jones Industrial Average futures off 3.3%, and Nasdaq 100 futures sliding 4.2%.

“The collapse of US equities after President Donald Trump announced his new tariffs will be remembered in the history books, as it prompted the fourth-largest two-day drop in the S&P 500 since its inception in 1957,” BBVA said in a note to clients on Monday.

The sell-off was triggered by Trump’s latest protectionist measures, including a 34% tariff on Chinese imports, on top of an earlier 20% hike, and an additional 20% duty on goods from the European Union.

On his social media platform Truth Social, Trump defended the move, claiming it was a remedy for “massive financial deficits” and describing the tariff revenues as “a beautiful thing to behold”.

European