Global financial markets are in turmoil as a result of the escalating trade war initiated by US President Donald Trump, reminiscent of the 1929 Wall Street crash and the 1930s Great Depression. Since Trump’s tariff announcement, over $5tn has been wiped off the value of global stock markets, with the S&P 500 close to entering bear market territory.
This current crisis is comparable to some of history’s biggest financial disasters, such as the 1929 Wall Street crash that triggered the Great Depression, the 1987 ‘Black Monday’ crash, the 2000 dotcom bubble burst, the 2008 financial crisis, the 2016 Brexit vote, and the 2020 Covid pandemic-induced recession.
Each of these events caused significant market turmoil, resulting in large losses and economic uncertainty. The 1929 crash saw a 90% loss in the value of companies on the NYSE, while the dotcom crash and 9/11 led to a drastic drop in stock market valuations. Additionally, the 2008 financial crisis saw the FTSE 100 lose almost a third of its value, and the Brexit vote resulted in more than $2tn of value being erased from global financial markets.
While the Covid pandemic triggered panic in financial markets, central bank interventions and government support helped stabilize the situation. As the trade war continues to escalate, investors are bracing for further volatility and potential global recession. Trump’s actions have sent shockwaves through global financial markets, leading to comparisons with some of history’s most significant financial crises.
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