New Delhi: According to economists, if the United States keeps moving in the same direction, the world economy may experience a severe downturn or recession, which would be marked by a sharp and pervasive decline in economic activity.
Citing the possibility that Trump’s trade policies may turn a robust global upswing into a crisis, Chief Economist at JPMorgan Bruce Kasman, estimated the likelihood of a recession at 60%.
Early Monday trading saw the Sensex and Nifty plummet more than 5%, sending stock market benchmark indices into a spiral. Early trading saw the 30-share BSE benchmark Sensex drop 3,939.68 points, or 5.22 percent, to 71,425.01. The NSE Nifty fell 1,160.8 points, or 5.06 percent, to 21,743.65. The stock market meltdown mirrored a precipitous decline in global shares after US President Trump’s tariff rises and China’s retaliation, which stoked concerns that a full-scale trade war would affect global economic development.
Everyone is paying close attention to the White House and the next developments in the ongoing trade war as the markets prepare for yet another turbulent week.
The market turbulence has drawn similarities to the 1987 “Black Monday” disaster, in which the global markets lost $1.71 trillion in a single day. Jim Cramer of CNBC warned that markets might see a similar disastrous catastrophe if Trump’s trade policies continue.
What Is Black Monday? What Exactly Happened Back In History?
Black Monday was the Monday of October 19, 1987, when the world saw a devastating and largely unexpected stock market meltdown. The estimated worldwide losses came to US$1.71 trillion. The severity of the crash raised concerns of prolonged economic instability or perhaps a Great Depression-like recurrence.
The Dow Jones Industrial Average (DJIA) fell 22.6% in a single day on “Black Monday”. Black Monday became one of the most infamous days in financial history as a result of this incident, which set off a global stock market decline. On the same day, the S&P 500 saw a 30% fall, which was much more severe. By early November 1987, the most major stock market indexes had lost more than 20% of their value due to the chaos that persisted throughout the month.