The US stock markets tanked more than 5 per cent on Friday after Donald Trump's reciprocal tariffs sparked fear among investors of a global economic recession.
US President Donald Trump has threatened to impose a 200 per cent tariff on champagne and other alcohol products from the European Union in response to EU tariffs on American whiskey and other goods. The move escalates trade tensions, impacting financial markets and fuelling recession fears.
There is growing concern that the global economy may be heading toward a slowdown, with some experts even warning about the possibility of a recession.
The rout on Wall Street began early, with all three major indexes opening in the red. US stocks witnessed a drop throughout the day, and despite a brief afternoon rally, they closed in the red.
Congress MP Pramod Tiwari on Friday, expressed concerns over declining production, recession, and inflation ahead of Union Budget, urging the government to take meaningful steps for economic stability.
During the Senate confirmation hearings, US Treasury Secretary-designate Scott Bessent called China an "unbalanced economy," and described the nation as being in a "severe recession."
JP Morgan outlines an optimistic yet complex global economic outlook for 2025, predicting a low likelihood of recession, estimating only a 15 per cent probability of an economic downturn in the first half of the year.
The stock market in the upcoming week will be looking at global happenings such as international market performance, anticipations of recession in the US, and domestic macroeconomic indicators such as IIP, CPI, and WPI inflation data, said market analysts.
At the post-monetary policy press briefing, RBI Governor Shaktikanta Das said that GDP growth figures in the US are doing well and it was not right to rush to a conclusion that the country was slowly slipping into recession.
During the early hours of trading, the Dow Jones Industrial Average (DJIA) plummeted by 1,083.07 points, a decline of 2.79 per cent, settling at 38,654.19.
The Indian rupee depreciated versus the US dollar on Monday to touch its all-time low, tracking global heavy selling in stock markets, over risks that the US may potentially slip into recession.