The Morning Edge: Global Trade War Escalates as Trump Doubles Down on Tariffs

Global markets started the week on a rocky note as tensions in the trade war intensified, with US President Donald Trump doubling down on tariffs and sparking retaliatory moves from key trading partners. Trump’s aggressive stance—threatening a 50% duty on Chinese imports and defending his approach as a “reset” for America—sent shivers through investor sentiment, dragging equities lower for a third straight day. “I don’t mind going through it,” he said, hinting at a long game with potentially high economic stakes.

China swiftly condemned the move, calling it economic bullying, while the European Union floated its own countermeasures—proposing 25% tariffs on American staples like soybeans and sausages. With economic titans squaring off and no resolution in sight, markets are bracing for more volatility as fears of a global recession take deeper root.

Data
Investor sentiment took a sharp hit in both the Eurozone and Australia in April, as US President Donald Trump’s sweeping tariff plans rattled global confidence. The Sentix index for the Eurozone plunged to -19.5 from -2.9 in March, marking its lowest level since October 2023. Economic expectations for the next six months tumbled by 33.8 points—one of the steepest drops on record—while sentiment toward Germany dropped even more sharply, down 36.3 points to -15.8. Meanwhile, in Australia, the Westpac-Melbourne Institute index of consumer sentiment fell 6.0% in April, snapping a three-year high and more than reversing March’s 4% gain. Though still up 9.3% from a year earlier, the index remains firmly in pessimistic territory, underscoring growing unease over economic and financial conditions.

Markets
Overnight
The benchmark US stocks indices S&P 500 and Dow closed lower on Monday after a turbulent session that saw all three major indexes hit one-year lows intraday, as investors weighed the dual threats of slowing growth and rising inflation amid President Trump’s tariff escalation. Trading volumes set records for the second straight day, reflecting heightened uncertainty. Sector performance was mixed: real estate plunged 2.4% (the worst performer), while communications services gained 1% and tech edged up 0.3%. Mega-cap stocks diverged sharply—Apple slid 3.7% and Tesla dropped 2.6%, but Nvidia rallied over 3% and Amazon rose 2.5%—highlighting the uneven impact of trade tensions across markets.

US Treasury yields surged Monday, with the 10-year note climbing 15.8 basis points to 4.149% - its biggest daily jump since April 10 - as trade war fears intensified following the EU's proposed counter-tariffs and Trump's threat of additional 50% duties on Chinese goods. The 2-year yield rose 6.2 basis points to 3.732%, rebounding from yesterday's 3.435% low-its weakest since September 2022, as markets rapidly repriced expectations amid growing concerns the Fed may need to maintain higher rates to combat potential tariff-driven inflation. 

The US dollar swung sharply on Monday, ultimately rebounding in late trade despite early weakness triggered by recession fears following President Donald Trump's sweeping tariffs. While the greenback hit a six-month low against the Swiss franc—down 0.44% at 0.85720—it reversed losses against the yen, rising 0.53% to 147.660. The dollar index, which had slipped earlier in the session, ended 0.6% higher as traders reassessed the greenback's role as a safe haven amid mounting uncertainty over the economic fallout of the new trade measures.

Brent crude oil prices dropped around 2% on Monday, hitting their lowest levels in nearly four years, as fresh concerns over a global economic slowdown weighed on demand outlook. The slide came after President Donald Trump's aggressive new trade tariffs fuelled fears of a recession. Brent crude settled at $64.21 a barrel, down $1.37 or 2.1%, while US West Texas Intermediate fell $1.29, also 2.1%, to close at $60.70.

Day’s Ledger
Economic Data:

• Eurozone February retail sales data
• Japan March FX reserves data

Corporate Actions:

• Mazagon Dock Shipbuilders to consider dividend
• Transformers And Rectifiers (India) to consider financial results
• Paisalo Digital to consider fund raising
• Zee Media Corporation to consider fund raising

Policy:

• Day-2 of RBI MPC meeting
• Oil Minister Puri to speak at Odisha Investor Connect Programme

Tickers

• ADANI PORTS AND SEZ announced commencement of operations at the $800 million COLOMBO WEST INTERNATIONAL TERMINAL in Sri Lanka.
• BHARAT ELECTRONICS signed a ₹22.1 billion contract with the Defence Ministry to supply EW suites for Mi-17 V5 helicopters. Total orders in FY25 now stand at ₹28.03 billion.
• BRIGADE ENTERPRISES signed a joint development deal for a residential project on 10 acres and 37 guntas. Project size is 0.37 million sq ft with GDV of ₹2.25 billion.
  IL&FS ENGINEERING AND CONSTRUCTION COMPANY defaulted on ₹26.28 billion in loans as of March 2025. Total debt, including short- and long-term, stands at ₹30.98 billion.
• KPI GREEN ENERGY terminated its 66.20 MW hybrid project order from SAI BANDHAN INFINIUM due to technical changes. The termination will not significantly affect financials.
• LEMON TREE HOTELS signed a license deal for KEYS PRIMA in Darjeeling. Managed by CARNATION HOTELS, the property is expected to open in FY26.
• MAHINDRA & MAHINDRA reported a 23.5% YoY rise in production to 88,701 units in March. Utility vehicle output rose 28.6%, while commercial vehicle production increased 14.2%, as per the company’s stock exchange filing.
• TITAGARH RAIL SYSTEMS re-appointed UMESH CHOWDHARY as Vice Chairman, MD and CEO for five years from October 1, 2025. VIJAY SUBRAMANIAN named Chief Transformation Officer, effective April 7.
• TITAN COMPANY posted 25% YoY revenue growth for the March quarter, ending FY25 strongly. Jewellery revenue rose 24%, driven by high gold prices. Plain gold jewellery grew 27%, and gold coin sales surged 65% despite muted buyer growth.

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