US stock markets fell heavily again on Monday in a breathtaking roller-coaster ride after more than £80 billion was wiped off the value of London stocks.
The S&P 500 closed lower on Monday after a frenzied session. According to preliminary data, the S&P 500 lost 14.22 points, or 0.28%, to end at 5,059.86 points, while the Nasdaq Composite gained 14.66 points, or 0.09%, to 15,602.44.
The Dow Jones Industrial Average fell 356.67 points, or 0.93%, to 37,958.19.
Earlier on Monday, the markets regained their ground and returned to positive territory amid reports President Trump was considering a 90-day tariff freeze for all countries except China, before plummeting back into the red once again.
The latest gyrations in New York came after more than £80 billion was wiped off the value of Britain’s leading companies as the London stock market dived again on fears about the fall-out from Donald Trump’s “nuclear” tariffs policy, which sent shares plunging around the world.
Within minutes of opening the blue chip FTSE-100 index of biggest London listed firms was down more than 6% before bounding slightly to stand at 7,712.4, down 342.57 points, or 4.25% .
That carves just over £84 billion from the combined value of Britain’s 100 leading quoted stocks.
FTSE 100 Live: Stock market rout deepens, index down 5% and S&P 500 set for bear market
It follows a fall of almost 5% on Friday leaving the Footsie at its lowest level since January 2024.
The huge wave of selling wiped billions of pounds from the value of Britain’s leading companies and will savage the pension funds of millions of savers.
It came after Donald Trump doubled down on his trade barriers policy insisting markets must take their “medicine.”
Susannah Streeter, head of money and markets, at investment platform Hargreave Lansdown said: ‘’The big flight to cash continues as investors seek a shelter for their money amid the tariff storm. Trump has dashed hopes for an easing of policy by calling tariffs ‘medicine’ and investors are absorbing the implications of this bitter pill for the global economy.”
“The tech-stock turmoil looks set to rampage for another day on Wall Street. The bears are already out in force across the Nasdaq, and futures indicate another steep fall for the index. ”
The biggest fallers in London included household names such as British Airways owner IAG which suffered a 9% drop, aero engine maker Rolls-Royce with a 10% decline and high street bank Barclays, down 8.8%.
Russ Mould, investment director at brokers AJ Bell said: “This market sell-off feels brutal because it is relentless. Often, we see one or two bad days then a rebound. We’re now on day three and the sell-off is intensifying, not dying down.
“Fundamentally, investors are worried about a big hit to corporate earnings and a massive slowdown in economic growth. The potential end to globalisation throws up more questions than answers and that uncertainty is causing havoc on the markets.”
It is the biggest slump in share prices in the City since the start of the pandemic just over five years ago.
The biggest single day’s loss in London’ modern stock market history came in the October 1987 crash when the FTSE-100 dropped 22.6% in a day. The biggest fall this century was the pandemic-induced 10.8% drop on 12 March 2020.
The broader-based FTSE-250 index of more domestically focussed businesses fell slightly less steeply, by just under 5%, or 914.33 points to 17,451.02.
Leading European bourses were also savaged by the wave of selling with Germany’s DAX down 7.6$, having been 10% lower at the start of trading, while France’s CAC 40 shedding 7%.
The slump in Europe follows heavy falls on Asian market overnight.
Japan’s Nikkei 225 Index fell 7% or 2,361 points to 31,418.89 today having been almost 9% down earlier in the trading session.
Banking shares were particularly badly hit with a bank index down as much as 30% over the past three sessions.
Hong Kong’s Hang Seng Index was hit even harder, down 13.2% or 3,021.51 points to 19,828.30. It was the market’s fourth ever biggest one day decline .
The collapse in Asian markets follows China’s decision to hit back at the US administration with reciprocal tariffs of 34% on US imports sparking fears of a full scale trade war sending the global economy into recession.
Today’s brutal reaction was amplified by the Hong Kong and mainland China markets were closed on Friday for the Ching Ming Festival.
Across region’s markets as a whole the MSCI Asia Pacific index plunged by 8%, the most since the financial crisis.
Billionaire investor and former Trump supporter Bill Ackman warned America was heading toward a self-inflicted “economic nuclear winter” as a result of the tariff policy.
“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,” Ackman, wrote on social media platform X.
But President Trump showed no sign that he was in a mood for backing down when he spoke to reporters on aboard Air Force One on his way back to the White House.
He said: “What’s going to happen with the market? I can’t tell you.
“But I can tell you our country has gotten a lot stronger, and eventually it’ll be a country like no other.”
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,”
Meanwhile accountants KPMG warned the UK economy faces a “material hit” from President Trump’s tariffs. It said growth is on track to slow to just 0.8 per cent this year and next.
