The global financial landscape witnessed one of its most turbulent weeks in recent memory, as escalating trade tensions between the United States and its global trading partners—particularly China—sent shockwaves through stock markets, energy futures, and investor sentiment. President Trump’s announcement of aggressive new tariffs and the subsequent retaliation from nations around the globe has cast a cloud of uncertainty over the global economy.$5 trillion wiped off Wall Street
Tariff Announcement Sparks Sell-Off
The week began with President Trump unveiling a set of comprehensive tariffs, exceeding market expectations in both scope and intensity. The announcement immediately rattled investors, with stock indices plunging and commodity prices following suit. Markets interpreted the move as a signal of an intensifying trade war, rather than a strategic negotiation tactic.
US refiners were among the first sectors to feel the heat. Shares of major refining companies—including Marathon Petroleum, Valero Energy, and Phillips 66—suffered sharp declines. Combined, these companies lost over $20 billion in market value, according to data from the London Stock Exchange Group (LSEG). This massive drop reflects growing investor anxiety about the global demand for fuel and the profitability of refining operations.
China Hits Back Hard
China, the world’s largest importer of oil and a key trading partner of the U.S., did not delay in announcing its countermeasures. The country declared that it would impose a 34% tariff on all U.S. goods starting April 10. This tit-for-tat retaliation highlights how deeply the trade war has escalated and how broad the implications could be.
Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, commented that these retaliatory tariffs are likely to stifle global economic growth. Weaker GDP growth, he noted, would naturally lead to reduced oil demand, lower oil prices, and thinner refining margins—a trend that has already begun to materialize in the futures markets.
Crude Prices Plunge to Multi-Year Lows
Energy markets experienced some of the most dramatic swings. On Friday, crude oil futures closed at their lowest levels in over three years. Brent crude dropped 6.5% to settle at $65.58 per barrel, while West Texas Intermediate (WTI) plummeted 7.4% to $61.99 per barrel. Both benchmarks recorded nearly 11% declines for the week—marking their largest weekly percentage losses since 2023.
While gasoline and diesel futures did not fall as steeply, they still posted losses of around 8% for the week. Analysts explained that the direct impact of tariffs has triggered a reassessment of future demand for oil and refined products.
Re-Examining Global Demand
Energy analysts at Rabo Bank noted that markets have been volatile for months due to tariff threats and sanctions. However, the actual implementation of widespread tariffs has forced traders and investors to re-evaluate global demand scenarios. This, in turn, has negatively impacted prices and outlooks for crude oil and its derivatives.
Wood Mackenzie’s Gelder emphasized that the refining sector is currently oversupplied, meaning that any potential for margin recovery hinges heavily on demand growth. With demand now in question, the future of refiners looks increasingly uncertain.
Tech Sector Leads Market Into Bear Territory
The equity market saw widespread selling, but the technology sector was particularly hard-hit. The Nasdaq Composite closed the week more than 20% below its December record high, officially entering bear market territory. The S&P 500 also recorded its steepest weekly decline since the pandemic-driven crash of March 2020, while the Dow Jones Industrial Average dropped over 10% from its December peak, confirming a correction for the blue-chip index.
This widespread sell-off reflects a combination of fear, uncertainty, and reevaluation of corporate earnings in the face of escalating trade tensions.
Mounting Losses and Uncertain Outlook
According to Jamie McGeever, a financial analyst covering the market chaos, nearly $5 trillion in U.S. stock market capitalization evaporated over just two trading sessions. This brings the total market cap decline since President Trump’s inauguration to nearly $8 trillion—a staggering figure that underscores the gravity of the current crisis.
JP Morgan analysts suggested that the new tariffs represent the most significant U.S. tax increase since 1968. Moreover, they now assess that a global recession is more likely than not, given the far-reaching implications of reduced trade flows and investor confidence.
Inflation Risks and Recession Fears
Adding to the pressure, economists at Barclays now project that U.S. inflation could surpass 4% within the year, while gross domestic product (GDP) may shrink in the fourth quarter—both clear indicators of recessionary trends. These projections were made even as Federal Reserve Chair Jerome Powell maintained a cautious stance, resisting calls for an immediate interest rate cut.
While Powell acknowledged heightened risks to both inflation and economic growth, his “wait and see” approach further unsettled markets. Investors hoping for central bank intervention were left disappointed, leading to further declines in equities.
Global Policymakers Scramble Behind the Scenes
As trading floors quieted over the weekend, discussions among global policymakers intensified. Governments are now working tirelessly to prevent a full-scale trade war that could derail the global economic recovery. Central banks are also weighing their responses, debating whether to adjust monetary policy to support faltering markets or to wait for further clarity.$5 trillion wiped off Wall Street
The week ahead is expected to be equally volatile. President Trump has set an April 9 deadline for his reciprocal tariffs to take effect, and markets are bracing for potential additional shocks if no diplomatic progress is made by then.
Investor Sentiment Hits New Lows
Financial experts warn that the uncertainty surrounding the tariffs is making it difficult for investors to make informed decisions. “The playbook on this is very, very unclear for everybody,” said Jeffrey Palma, Head of Multi-Asset Solutions at Cohen & Steers. With retaliatory tariffs and political tensions mounting, forecasting market direction has become increasingly complex.
Many are now looking for signs that the stock market may have reached a short-term bottom, though confidence remains fragile. Volatility is expected to persist, and investor caution is likely to dominate until there is greater clarity on the geopolitical and economic implications of the tariff conflict.
Conclusion
The past week has marked a pivotal turning point for global markets, driven largely by the aggressive escalation of trade tensions initiated by President Trump’s tariff announcements. From collapsing crude oil prices and stock market turmoil to increased recession risks and inflationary pressures, the consequences of this policy shift are becoming increasingly evident.
As the world waits to see how the U.S. administration and its trading partners respond in the coming days, one thing is clear: the path ahead will be rocky, and markets will remain on edge until there is a credible roadmap for resolving the escalating trade conflict.$5 trillion wiped off Wall Street