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Global markets fell on Monday, with US stocks on track for their worst quarter since 2022, on fears of an escalating trade war led by President Donald Trump.

The S&P 500 was down 0.4 per cent in lunchtime trading in New York, having fallen more than 5 per cent this quarter. The tech-heavy Nasdaq Composite dropped 1.2 per cent.

European and Asian stocks closed down sharply, accelerating a sell-off that began last week after Trump said the reciprocal trade duties he is expected to announce on April 2 would apply globally.

After recovering some ground later in the day, Europe’s broad-based Stoxx 600 index ended down 1.5 per cent, while the UK’s FTSE 100 lost 0.9 per cent.

“We’re seeing another wave of US-led selling,” said Trevor Greetham, head of multi-asset at Royal London Asset Management. “There’s been no let-up from Trump.”

US technology stocks were hit on Monday, with chipmaker Nvidia falling 4.1 per cent, while Tesla lost 4.4 per cent, as some of the key beneficiaries of Wall Street’s recent record run continued to suffer.

Consumer-facing companies and other economically sensitive stocks also fared badly, with International Airlines Group down 6.6 per cent and United Airlines dropping 3.4 per cent amid concerns over demand for flights.

Trump’s tariff threats have also had a big impact on the industrial commodities sector. London-listed Anglo American fell 4.8 per cent, while Glencore lost 4.2 per cent.

“I don’t necessarily see the floor quite yet,” said Sharon Bell, senior equities strategist at Goldman Sachs.

The US investment bank has increased its tariff expectations, while downgrading GDP forecasts for the US and Europe. It is now pricing in a more aggressive 15 per cent reciprocal tariff across Washington’s trading partners, and sees a higher probability of a US recession.

The tariff threat “ups the risk premium that you put on equities”, said Bell, although she added that the US stock market had “other issues”, including a slowing pace of growth and public sector cuts.

Gold surged as high as $3,128 a troy ounce, a fresh record, while US Treasury yields declined, in a sign that investors were switching into safer assets. The 10-year yield, which moves inversely to prices, fell 0.02 percentage points to 4.24 per cent.

The latest moves came after Trump addressed reporters on Air Force One on Sunday, saying about the tariffs: “You’d start with all countries, so let’s see what happens.” Last week he had hinted at concessions for some countries.

The US president singled out Asia for its trade practices. “Take a look at trade with Asia. I wouldn’t say anybody has treated us fairly,” he said.

The chaotic rollout of Trump’s aggressive trade agenda has roiled markets and alarmed the US’s trading partners, many of which have threatened to retaliate.

The US president has said that, on Wednesday — which he has dubbed “liberation day” — he will impose levies on any country the White House deems to have an unfair trading relationship with the US.

Charles De Boissezon, global head of equity strategy at Société Générale, said cyclical stocks, whose performance tends to fluctuate with the economy, were suffering. “It is much more the uncertainty overall [that is] weighing on investor sentiment,” he said. “The [tariff] announcements keep on changing, but what they have in common is that [they’re] just not good for growth globally.”

In Asia on Monday, Japan’s benchmark Topix dropped 3.6 per cent and the exporter-oriented Nikkei 225 slid 4 per cent. Hong Kong’s Hang Seng retreated 1.3 per cent.

“Many investors are [waiting] for actual tariffs to be announced, unwinding their positions and realising gains,” said Wei Li, head of multi-asset investments for BNP Paribas in China. “This tariff announcement . . . has affected the whole market sentiment.”

The S&P 500 dropped nearly 2 per cent on Friday. The tech-focused Nasdaq Composite slid 2.7 per cent as gloomy data on the economy and consumer sentiment raised fears about stagflation.

The dollar was up 0.3 per cent against a basket of its major trading partners. Having strengthened after Trump’s election on the anticipation of tariffs feeding inflation, the greenback has weakened this year as investors have grown more concerned about the impact of the trade war on the US economy.