Trump threatens more China tariffs; Dow sinks 920 points amid global rout

Amid a major meltdown in stock markets globally, the US stocks are seeing volatile trading on Monday as well, as US President Donald Trump refuses to back down or put a pause on high tariffs imposed on the country's key trading partner countries.

The US stocks saw an initial spike on Monday after unconfirmed reports said the US might put a pause on the tariff hikes for 90 days, but it was short-lived.

The White House soon clarified to CNBC that there were no such discussions in place and that it was "fake news". Refusing to back down, media reports said, US President Donald Trump has threatened to impose additional 50% tariffs on China if it fails to roll back the retaliatory tariffs imposed on US exports to the country.

The clarification led to key benchmark indexes including the S&P 500, Dow Jones Industrial Average and Nasdaq Composite falling 1.7%, 2.4% (920 points), and 1.4%, respectively.

With today's fall, S&P has fallen 10.85% or 620 points in the past five days, while the Nasdaq Composite and Dow Jones Industrial Average have seen 10.86% (1,876.74 points) and 10.60% (4,439 points) drops, respectively.

European markets have also witnessed a similar rout, with the pan-European Stoxx 600 index falling up to 6% in the early trading session, recovering some losses in the afternoon sessions. Germany's DAX plunged 10%, closing 2.2% in the negative by the closing time.

In Asia-Pacific markets, comprising stocks listed at major exchanges in Shanghai, Tokyo, Sydney and Hong Kong, saw their worst day, not seen in decades. The Shanghai Composite dipped up to 8%, Hang Seng plunged 13%, and Japan's Nikkei 225 closed the day at -7.8%. Australia's ASX 200 also closed 4.23% or 324 points down.

The Indian share market, meanwhile, wiped out nearly ₹18 lakh crore of investors' wealth within minutes in Monday's sell-off on Dalal Street. The domestic equity benchmarks BSE Sensex and NSE Nifty50 fell over 5% in early trade, recording their biggest one-day loss in value since the outbreak of the Covid-19 pandemic in March 2020. The meltdown dragged the overall market capitalisation of BSE-listed companies to ₹385 lakh crore from over ₹403 lakh crore in the previous session.

During the intra-day trading, the Sensex fell over 5,000 points (6.7%) to breach the 71,500 level in three sessions, eroding investors' wealth by ₹28 lakh crore. During the same period, the broader Nifty50 plunged 1,744 points (8%) to hit the 21,743 mark. However, recovering some losses by the closing time, Sensex was down 2.95% or 2,226.79 points, while Nifty closed 3.24% or 742.85 points down.

India VIX, also known as the fear index, spiked 68.5% to 23.19, indicating high volatility to persist in the market amid global trade war concerns. The VIX is a volatility index calculated by the exchange to measure the market's anticipation of volatility and fluctuations in the near term.

Trump has announced around 10%-46% duties on the imports of most countries, including a reciprocal tariff of 26% on Indian exports, though relatively lower than most countries. China faces an additional 34% tariff on exports to the US, while Japan and South Korea also face 26% tariffs. Vietnam is bracing for 46% duties, while Cambodia and Thailand will embrace 49% and 36% duties, respectively.