On Monday, the U.S. stock market experienced a sharp decline, with tech stocks falling across the board. Nvidia and Broadcom dropped nearly 5% and 4% respectively. Nevertheless, Hut 8 Mining's stock price defied the trend, rising by 5.3%, and they announced a partnership with Eric Trump, Trump's son, to establish a U.S. Bitcoin company. This news spurred Bitcoin prices to surge past $83,000, prompting a rebound in the cryptocurrency market. However, due to the overall decline in the U.S. stock market, Asian markets, especially Chinese stocks, generally fell, with the Nasdaq Golden Dragon China Index dropping by 1%. Many Chinese stocks such as Niu Technologies, Dingdong, NIO, and Baidu saw significant price drops.
Latest economic data indicate that the U.S. economy is facing the risk of stagflation. A survey released by mainstream financial media showed the U.S. economic growth rate for the first quarter was only 0.3%, far lower than the 2.3% in the fourth quarter of 2024. Goldman Sachs economists expect the Federal Reserve to cut interest rates three times this year in July, September, and November, revising previous expectations of two cuts. Additionally, the U.S. plans to impose reciprocal tariffs on the EU, which could further exacerbate global economic uncertainty.
Trump's fluctuating stance has added more uncertainty to the markets. Previously, Trump threatened to impose secondary tariffs of 25% to 50% on Russian oil, stating these would take effect within a month if a ceasefire wasn't achieved. However, he later stated that oil sanctions would not be implemented for now and expressed optimism about progress with Russia on the Ukraine issue. This unstable position has heightened investors' concerns about future economic conditions.
The Governor of the Bank of Italy, Panetta, and BlackRock CEO Larry Fink have also expressed concerns about Trump's trade policies. Panetta noted that global economic uncertainty remains high, especially due to geopolitical and trade tensions, which put pressure on the manufacturing-dependent European economy. Fink warned that the trade conflicts initiated by Trump have pushed investor anxiety about the global economy to its highest level in recent years.
As concerns about economic recession intensify, Moody's and Goldman Sachs have both raised the probability of a U.S. recession. Goldman Sachs predicts a 35% chance of a recession. Economists and investors are closely watching the further development of Trump's government policies and potential monetary policy adjustments by the Federal Reserve.
