Berliner Boersenzeitung - Stock markets slump on US economic fears

Wall Street deepened its losses around 1500 GMT, with the tech-heavy Nasdaq falling more than three percent, after Trump himself declined to rule out the risk of a US recession.

"I hate to predict things like that," he told Fox News on Sunday when asked directly about a possible recession this year.

"There is a period of transition because what we're doing is very big -- we're bringing wealth back to America," he said, adding: "It takes a little time."

Trump's on-again, off-again tariff threats against Canada, Mexico, China and others have left the US financial markets in turmoil and consumers unsure what the year might bring.

The Nasdaq was bogged down by retreats in the so-called Magnificent Seven tech stocks, which include Google parent Alphabet, Amazon, Meta and Nvidia.

Stocks in electric carmaker Tesla, owned by Trump's billionaire advisor Elon Musk, slumped by more than 8.3 percent.

"Unease about the effect of Trump's tariffs hangs over financial markets at the start of the week," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"The prospect of a recession in the US is lurking, with consumer confidence falling, companies facing increasing trade complexity and investors turning more nervous," she added.

"Risk sentiment has soured as investors react to President Trump's various tariff announcements and as the US economic outlook begins to cloud over," added David Morrison, senior market analyst at financial services firm Trade Nation.

- German spending plan -

The London, Paris and Frankfurt stock markets were all lower in afternoon deals.

The European Union's trade commissioner Maros Sefcovic complained that "the US administration does not seem to be engaging to make a deal" to avoid tariffs against the 27-nation bloc.

Kathleen Brooks, research director at trading platform XTB, said investors were reacting to news that Germany's chancellor-in-waiting, Friedrich Merz, could face opposition to a massive spending plan that boosted markets last week.

Germany's Green party said Monday that it would not give the votes necessary for the constitutional changes proposed by Merz.

These would partially lift spending limits in defence and establish a 500-billion-euro ($540 billion) infrastructure fund.

"The news that Germany's soon-to-be chancellor might not have free reign over Berlin's purse strings has limited euro upside for now," Brooks said.

Traders also reacted to weekend data from China showing that consumer prices fell 0.7 percent in February, the first drop in 13 months.

"The data only reinforces what's been clear for months -- deflationary pressures remain firmly entrenched in the world's second-largest economy," said Stephen Innes at SPI Asset Management.

Beijing's retaliatory duties on certain US agricultural goods came into force on Monday after Chinese products were hit with 20 percent US tariffs.

Hong Kong and Shanghai stock markets fell, while Tokyo finished higher.

- Key figures around 1545 GMT -

New York - Dow: DOWN 1.14 percent at 42,312.52 points

New York - S&P 500: DOWN 2.09 percent at 5,649.39

New York - Nasdaq: DOWN 3.25 percent at 17,604.67

London - FTSE 100: DOWN 0.75 percent at 8,614.55

Paris - CAC 40: DOWN 0.64 percent at 8,069.00

Frankfurt - DAX: DOWN 1.61 percent at 22,639.24

Tokyo - Nikkei 225: UP 0.4 percent at 37,028.27 (close)

Hong Kong - Hang Seng Index: DOWN 1.9 percent at 23,783.49 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,366.16 (close)

Euro/dollar: DOWN at $1.0825 from $1.0844 on Friday

Pound/dollar: UP at $1.2904 from $1.2925

Dollar/yen: DOWN 147.24 yen from 147.97 yen

Euro/pound: UP at 83.89 pence from 83.87 pence

Brent North Sea Crude: DOWN 0.71 percent at $69.86 per barrel

West Texas Intermediate: DOWN 0.61 percent at $66.63 per barrel

(L.Kaufmann--BBZ)