Pass between tariffs: will the markets be able to recoup the fall on Black Monday

It may take at least three months for global stock markets to recover, and this is in a positive scenario if US President Donald Trump quickly comes up with a solution to the economic conflict he has unleashed, concludes agreements with trading partners and at least partially cancels duties. If the situation only worsens, the decline in the indices may last for a year or more. Quotes in Asia, Europe, and the United States have been falling for the third consecutive session, but the process accelerated on April 7. Experts believe that this day can be called "black Monday", and the week after the introduction of tariffs is quite acceptable to be dubbed "creepy". How the world's platforms sank in April — in the material of Izvestia.

Black Monday for stock markets — April 7, 2025

On Monday, April 7, the markets fully played out China's retaliatory measures to Trump's duties, which he announced on the afternoon of the previous Friday. The actions of the Chinese government indicate that the country is not going to make concessions. This means that a full-scale trade conflict between the world's two largest economies is almost inevitable.

The MSCI Asia-Pacific index, which reflects the market capitalization of its member countries, fell by 6.8% on Monday, which was the worst result since 2011. The performance of Taiwan's stock market (TSEC Capitalization Weighted Stock Index) has collapsed by almost 10%. The Japanese Nikkei index increased by 8%. And Hong Kong's Hang Seng lost 13% altogether, dropping to its lowest level since 1997, according to these sites.

— China's technology sector is minus 17%. For example, Alibaba shares have a record one—day drop of minus 20%," said Ivan Potekhin, Director of Customer Relations at BCS World of Investments.

In Europe, the German DAX index fell by 10% in a day, the French CAC and the British FTSE fell by 3%. And the Stoxx Europe 600 index, which reflects the quotes of the 600 largest companies in the region, lost 5.8%.

— The decline in Europe has been going on continuously since Thursday — on the night of this day, Trump announced duties against the largest economies. In total, losses over the past trading sessions have already amounted to about 15%. This is the fastest decline since the first lockdowns of the 2020 pandemic, which is a five—year record," said Kirill Seleznev, an expert on the Garda Capital stock market.

The Russian market did not stay away from Europe and Asia either. On Monday, the Moscow Exchange index fell by 3%, falling below 2,700 points for the first time since the end of December. At the same time, over the past five days, the quotes of domestic companies have lost more than 10%. However, in the last two months, the Russian market has been overheated due to positive investor expectations regarding negotiations between Russia and the United States on the settlement of the conflict in Ukraine.

The American market is also in the red. At the opening of trading on April 7 (at 16:00 Moscow time), the S&P 500 and Dow Jones indices lost 3.5% (-13% and -12% in five days, respectively), the Nasdaq Composite — 4% (-9% in five days).

Such a drop in markets, especially in Asia and Europe, can be called "Black Monday", stated Ivan Potekhin from BCS World of Investments. Although, in general, this metaphor was fixed on October 19, 1987, when the Dow Jones index lost 22% in one day. The reason at that time was economic instability, overheating of the market, and the fact that automatic trading systems began to be used on the stock exchange — they only reinforced the decline.

— At the same time, it has been falling for several days now. Maybe we'll see a "creepy week" or a "nightmare month." It depends on how the situation changes," suggested Kirill Seleznev from Garda Capital.

What will happen to stock markets due to Trump's tariffs: forecast

There was already a similar precedent in history in the 1930s - then, during the Great Depression, the United States increased import duties on foreign products to 60%, Ivan Potekhin recalled. Then, as now, the actions were aimed at protecting the domestic producer, but above all against European competitors.

At that time, the measure only accelerated the global economic collapse, hindering economic cooperation. After that, the S&P 500 declined by 68% over the next 18 months before returning to growth, the expert recalled. This option, if solutions are not found quickly, is also possible in 2025.

Due to the duties, China's GDP will lose at least 0.7% this year, and the technology sector will be the most affected, the expert explained. And the growth of the Eurozone economy may slow down by 0.5-1%.

Russia is heavily dependent on Chinese demand: The faster its economy grows, the greater the appetites that need to be satisfied, which is certainly beneficial for us as suppliers of energy resources and metals to this country, Ivan Potekhin noted.

The further dynamics of the domestic stock market will depend on the news: a moderate rebound in the Moscow Exchange index to 2,900-3,000 points is possible only in a positive scenario if ruble oil prices can recover, weekly inflation data show a slowdown, "soft" verbal interventions from our Central Bank will sound, or trade de-escalation from Trump will become noticeable, the head of the analysis department listed shares of FG "Finam" Natalia Malykh. But a recovery to 3,300 points still looks unlikely, she stressed.

— The prospects depend entirely on Trump's decisions and how he will get out of the situation he has created. I would have assumed that he would back down under pressure from his own party members. They are all investors, they all have large portfolios of securities, and they are all terrified of what is happening," Kirill Seleznev holds a more positive opinion.

According to his expectations, some kind of deal is possible in the coming months, which Washington will present as an extremely profitable trade agreement for America. Both China and other countries will be interested in signing such a document.

According to the expert's forecasts, if this happens, the markets may well return to their starting position in the coming year. In 2018, during Trump's first term, it took about three months. However, then the scale of the trade war was more modest.