Global financial markets are facing heightened volatility as tensions escalate surrounding trade policies introduced by the Trump administration.

Investors’ fears prompted a significant sell-off, with many stock indices reflecting red across the board, a phenomenon being dubbed 'Manic Monday' by various media outlets.

The European trading session concluded similarly to its start, with declines in all major stock indices.

The Spanish benchmark index, the IBEX 35, experienced a drop of nearly 7% at one point, ultimately ending the day down by 5%.

Throughout the day, all companies listed on the IBEX 35 closed in negative territory.

The most modest declines included Arcelormittal at -2.9% and Puig at -3.09%.

In contrast, the most severe losses were recorded by Cellnex (-7.47%), Acciona (-7.14%), and Indra (-7.02%).

Indra’s decrease highlights the impact of the ongoing trade war, extending even to Europe's top-performing sectors.

Notably, defense contractors like Rheinmetall, Thales, Leonardo, and Airbus saw significant declines, with Rheinmetall dropping by 13.5% at market open due to disruptions in their supply chains attributable to tariffs.

Furthermore, the oil sector was notably impacted, with Repsol facing a 6.86% decline as it announced an 8.5% production cut for 2024. The consumption and leisure sectors also reflected losses, including IAG at -6.45% and Amadeus at -6.28%.

The fear of an impending recession and consequent reduced economic activity particularly affected the financial sector, with notable losses for Sabadell (-5.47%) and BBVA (-4.84%), which at times led the declines in the session.

Within Europe, all markets concluded the day in the red, although some managed to contain their losses.

The Italian market experienced a significant drop of 5.18% at midday, down from an initial plunge of 9.17%.

The DAX in Germany reduced its initial drop of 10% to 4.13%, while the Paris market fell by 4.78%, down from 7%, and the London Stock Exchange corrected its decline to 4.64% from an early 6% dip.

In the European debt market, the yield on the Spanish 10-year bond increased to 3.345% from 3.274% at the previous Friday's close, resulting in a rise in the risk premium to 73.20 basis points.

In currency markets, the euro traded at 1.0914 US dollars.

Analysts from Bankinter described the situation as "frankly complex" and deemed a significant softening of tariff measures in the short term as unlikely.

In such a context of heightened volatility, downward revisions of corporate valuations and stock indices are expected to continue.

Asian markets have also suffered losses, with fears growing of a potential 'Black Monday' on Wall Street.

Wall Street's volatility has surged, especially after an errant interpretation of comments by Kevin Hassett, head of the US National Economic Council, about a potential 90-day tariff pause prompted sharp market fluctuations.

Initially, the NASDAQ rebounded by 2.33%, while the S&P 500 increased by 1.69%, and the Dow Jones by 0.87%.

However, these gains were short-lived, as a subsequent denial from the White House led to renewed sell-offs across the board.

The VIX index, often referred to as the 'Fear Index', spiked to 49 points at Wall Street's opening, up from 58.7 points earlier in the morning, marking the highest level since March 2020. Market tensions have persisted following aggressive tariff policies announced by Trump, catching global markets off guard since last Wednesday.

Significant tariffs set to take effect on April 9 are causing market anticipations of further impacts.

In Asia, the trend of declines continued across all markets following tariff announcements affecting various countries.

The Japanese Nikkei 225 index closed the trading session down by 7.82%, with the broader TOPIX index also reflecting serious losses at 7.79%.

Mizuho Financial Group, a key player in the financial sector, experienced a 10.6% decline.

The Korean KOSPI index slid 5.57%, and the Taiwanese TAIEX index dropped by 9.7%.

The Hang Seng index in China plummeted by 13.22%, marking its worst performance in nearly three decades, as Chinese authorities assess measures to stabilize both the economy and the markets.

In response to the 34% tariffs imposed by the US on Chinese imports, China's Ministry of Commerce has hinted at implementing reciprocal tariffs that mirror the US measures, thus further escalating market tensions.

Analysts anticipate prolonged uncertainty and volatility in markets in the coming days and weeks due to the slim prospects of a resolution in the trade conflict, emphasizing that the tariffs do not represent an end in themselves for US policy but instead a means to bolster domestic manufacturing and jobs.