And finally, a late rally in New York has seen the US stock market close higher tonight. However, the picture over the last month is less impressive.

Today, the S&P 500 share index was up 30 points at the closing bell, a rise of 0.55%, having fallen over 1% in morning trading.

The Dow Jones industrial average jumped around 1%, gaining 417 points to 42,001 points.

But March was still a grim month for US stocks, as investor confidence was hit by growing trade war fears.

The S&P 500 fell 5.7% in March, Reuters calculates, which is its biggest monthly fall since December 2022.

With European stock markets closed, here’s a quick recap.

Global stock markets are on track to post their biggest monthly fall since September 2022, after several weeks in which trade war fears have hit share prices.

European stock markets have closed in the red, with the UK’s FTSE 100 losing almost 1% and bigger losses in Paris and Frankfurt.

That followed heavy losses in Asia where Japan’s Nikkei index lost 4%.

The selloff came after Donald Trump said on Sunday that the reciprocal tariffs he is set to announce this week will include all nations, not just a smaller group of 10 to 15 countries with the biggest trade imbalances.

That has fuelled fears of a global trade war which would hurt growth and drive up inflation.

In other developments:

• Today’s losses are on top of falls during March which have dragged down the MSCI world share index by at least 4.5%, its biggest monthly drop since September 2022.

• Goldman Sachs has lifted the chances of a US recession in the next year to 35%.

• UBS cut its end-of-year forecast for the US stock market.

• A majority of Britons predict the UK will be in recession, or worse, in a year.

• The yen strengthened, as the US dollar headed for its biggest monthly loss since November 2022.

• Gold hit a fresh record high

Downing Street says it expects the UK to be hit by more tariffs when Donald Trump announces his latest round of trade barriers on Wednesday, and said it “reserves the right” to respond to protect the national interest.

After a choppy day, London’s stock market has closed firmly in the red, although off its earlier lows.

The FTSE 100 index of blue-chip shares listed in the City has ended the day down 76 points, or -0.9%, at 8582 points. That’s a two-week low, and the biggest one-day loss in three weeks.

IAG, which owns British Airways, was the top faller, down 6.6% after rival Virgin Atlantic reported that demand from the US was slowing.

Mining companies were also in the top fallers, on concerns that a global trade war will hit growth, and demand for commodities.

In March as a whole, the FTSE 100 share index has fallen 2.6%, its biggest monthly loss since October 2023.

Curiously, the Dow Jones industrial average has now shaken off its earlier losses.

The much-storied index, which track 30 large US companies, is now up 31 points, or 0.076%, at 41,615 points.

However, the S&P 500 – which is a much broader measure of the health of the markets – is still in the red, down 0.65% or 36 point lower at 5,544.

Today’s sell-off has dragged the S&P 500 index of US shares into correction territory – more than 10% off its all-time high.

By Kathleen Brooks, research director at XTB, sums up the mood:

There is an air of capitulation in financial markets ahead of the April 2^nd reciprocal tariff announcement from the US. Global stocks are all in the red, the Eurostoxx 50 index is down by 1.7%, and all sectors are in the red. The biggest decline is for industrial stocks and consumer discretionary, followed by the financial sector. Reciprocal tariff fears are infecting the whole stock market, even defensive sectors like energy and utilities are lower at the start of the week, which is a sign that investors are cutting their positions sharply and choosing to pause ahead of this week’s tariff announcements.

US stocks have also plunged at the open on Monday and the S&P 500 is now in correction territory, dipping 10% from its peak in mid- February.

Tariff fears have deepened over the weekend, there has been no let up from President Trump who said that no country would be able to avoid his reciprocal tariffs.

This dashed any hopes for a last-minute reprieve. There is no where to hide in the stock market, as equities get caught up in the tariff headwinds, which is not helped by the fact that it is the last trading day of Q1.

US stock indexes have opened sharply lower in New York, aa fears that the Trump White House will announce wide-ranging tariffs trigger a stampede to the exits.

In early trading, the Dow Jones Industrial Average has dropped by 304 points, or 0.7%, to 41,278. The broader S&P 500 has dropped by 1.4%, while the tech-focused Nasdaq has lost 2.4%.

Investors on Wall Street, like in Europe and Asia, are alarmed by Donald Trump’s warning over the weekend that Wednesday’s reciprocal tariffs will “start with all countries. Essentially all of the countries that we’re talking about.”

Traders will have also noted Goldman Sachs’s warning that there is now a 35% risk of a US recession.

These losses mean world stock markets are firmly on course to make March their worst month since 2022, as covered in the introduction.

As Investec analysts explains:

After a bruising period of uncertainty, businesses and financial markets are braced for the US administration’s planned announcement of extra tariffs on 2 April. Behind the scenes, negotiations are underway to limit the damage to trade from ‘Liberation Day’, as Trump has dubbed it.

The scope for this is unclear: if tariff rises are to raise meaningful funding towards tax cuts they will need to be both large and durable. But it is not just US actions that will impact economies; countermeasures will too.

Conversely though, the planned big step up in European defence spending is a tailwind to counter at least some of the headwinds from US policy shifts, which in any case will not fall evenly across countries. Uncertainty looks almost certain to persist beyond 2 April, leaving scope for markets, and us, to reassess the outlook in future.

A UK recession is more than likely this year for two reasons, to say the least, Professor Costas Milas of the University of Liverpool’s management school tells us:

1. Divisia money growth, which is a reliable predictor of UK growth, has just slowed down to 2.4% per annum in February (down from 2.8% in January).

2. As I also write in my LSE Business Review blog, Trump’s trade wars are already impacting negatively on business investment, and consequently UK economic growth. Nevertheless, Trump’s trade wars have not yet “commenced” in full strength. If trade wars accelerate from April the 2nd onwards, the impact will be much more severe, and therefore, it is more likely than not that we will end up with a UK recession...

Politico are reporting that “swaths of Republicans on Capitol Hill” are scrambling to shield their states from Donald Trump’s next wave of tariffs.

While the US president claims tariffs will benefit America, it seems many of his own party have realised the damage that slapping tariffs on imports, and risking a tit-for-tat trade war, will have.

Politico says “dozens of GOP lawmakers”” are privately worried that another round of tariffs will raise prices on U.S. consumers, cripple American farmers and rattle the stock market.

They explain:

In anticipation, they are coordinating with various industry groups to push the administration for exemptions that protect key local industries from that kind of pain. They’re also trying to effectively void some of the tariffs on key products once they go into effect, lining up to push Trump officials for so-called exclusions.

Their quiet maneuvering signals the heightened anxiety among Republicans about the next phase of his trade wars — and the political pitfalls ahead for the president and his party. Four Republicans with direct knowledge of the strategy, granted anonymity to discuss the private conversations, described the behind-the-scenes planning as concerted and targeted.

The Wall Street futures market does not make pleasant viewing from the White House.

Trump Media & Technology Group Corp, which runs the US president’s Truth Social social-media platform, are on track to fall 3.7% when trading begins in an hour’s time.

Elon Musk’s Tesla is also heading for a bath – its shares are down 6% in premarket trading.

With world markets in retreat, investors are “voting with their feet” ahead of Wednesday’s announcement about which broad-based secondary tariffs the US will impose.

So explains Tom Stevenson, investment director at Fidelity International, who points out that tariffs will hurt the US economy as well those of its trading partners.

Stevenson says:

“The US’s approach to tariffs has been so unpredictable that no-one is prepared to second guess what will actually happen come Wednesday, which has been dubbed Demolition, as well as Liberation, Day. It’s a question of take cover first and assess the danger later.

“Investors are starting to price in the growing likelihood of a painful cocktail of recession coupled with stubbornly high inflation. What has surprised many is the extent to which the President seems prepared to take a hit to the economic prospects of the US as well as the rest of the world.

“The nature of protectionism is that it hits American businesses and consumers just as hard as those in the US’s rivals. Tariffs raise prices and curtail confidence and growth for the country levying them as much as for the apparent targets.

“So, the big question facing investors now is whether a 10% market correction prices in all the damage to come or whether there is worse to come. For global investors, a related question is whether the rotation out of the US and into other markets like Europe and China can offset the pain or whether America sneezes and the rest of us catch a cold.

Stocks are falling more sharply in London, as hopes fade that London could avoid Donald Trump’s ‘liberation day’ tariffs.

Downing Street has revealed it is expecting the UK to be hit by Donald Trump’s tariffs this week, as discussions with the US are set to continue beyond Wednesday.

The Prime Minister’s official spokesman said today:

“When it comes to tariffs the Prime Minister has been clear he will always act in the national interest and we’ve been actively preparing for all eventualities ahead of the expected announcements from President Trump this week, which we would expect the UK to be impacted by alongside other countries.

“Our trade teams are continuing to have constructive discussions to agree a UK-US economic prosperity deal. But we will only do a deal which reflects this Government’s mandate to deliver economic stability for the British people, and we will only act in the national interest.”

Asked whether the Government had given up hope of a deal being signed before Wednesday, the spokesman said he is “not going to put a time frame on those discussions” but that they are “likely to continue beyond Wednesday”.

He said that the UK will “take a calm and pragmatic approach in our response”.

The FTSE 100 index of blue-chip shares listed in London is now down 120 points, or 1.4%, at a new two-week low.

The smaller FTSE 250 index, which is more domestically focused, has lost 2% today.

In the media world, The Sun has recorded its smallest annual loss since the start of the costly battle by its parent company to end allegations of illegal phone hacking almost 15 years ago, as total losses hit more than £1.2bn since 2012.

News Group Newspapers (NGN), which publishes the Sun and retains liability for the activities of the now defunct News of the World, reported a pre-tax loss of £18m in the year to 30 June 2024.

This is the smallest loss reported since 2011 - when the Sun made a profit of £103.6m - and accounts filed at Companies House since then show total pre-tax losses at NGN climbed to £1.25bn in total by the end of June last year.

In January, the Duke of Sussex became the latest victim, and arguably the most high-profile, to settle his legal claim against NGN with an undisclosed substantial payout that will be included in the company’s filings next year.

NGN’s latest accounts show that Rupert Murdoch’s newspaper empire incurred fresh costs of £14m related to legal costs and settlements in the phone hacking scandal against The Sun and News of the World last year.

This is the smallest amount since NGN started revealing phone hacking costs in 2011, and well down on the £51m in 2023 and £128m in 2022.

Filings have also been published for Murdoch’s struggling rightwing news media venture, TalkTV, that show that total losses have now climbed to £145m since its launch in 2022.

The business, which shut down its TV channel to go online-only last year, reported a £50.4m pre-tax loss in the year to June 2024.

In January, Piers Morgan, TalkTV’s star signing, announced he was leaving Murdoch’s media empire to take control of his Uncensored YouTube channel, having previously announced in February 2024 that he was leaving his daily evening TV show.

On a brighter note the Times and Sunday Times reported a slight year-on-year uptick in annual profits to £61m for the period ending June 2024.

Parent company Times Media, which also includes the Times Radio operation, took a £3.2m charge to “restructure its workforce to match the requirements of the business”. In 2023, the company booked a £7.9m restructuring expense.

Wall Street is set to join the global sell-off when trading begins in just over three hours time.

The futures market shows that the Dow Jones industrial average is on track to fall 0.6%, while the broader S&P 500 index is down almost 1%.

Investors in New York are increasingly anxious about the tariffs which Donald Trump plans to announce on Wednesday.

Raffi Boyadjian, lead market analyst at XM, says:

Hopes that this week’s reciprocal tariffs would not be as harsh as feared were dashed over the weekend after US President Trump doubled down on his pursuit of using import levies to ‘make America great again’. With just a couple of days to go until the White House outlines the details of the reciprocal tariffs – the broadest set of restrictions yet to be unveiled by the Trump administration – there is a growing sense of panic in the markets about the scale and implications of the April 2 announcement.

The renewed jitters about Trump’s trade policies come after the President made a series of comments in the past 48 hours about the upcoming tariffs. The Washington Post reported on Saturday that Trump is urging his advisors to be more aggressive on tariffs as pressure grows on the US to tone down the rhetoric. But his toughening stance was reinforced on Sunday when Trump told reporters that the reciprocal tariffs will target “all countries”, not just the top 15 countries that have the largest trade imbalance with the US.

Further underscoring the view that Trump won’t back down this time were his comments to NBC News on Saturday that he “couldn’t care less” about US car prices going up following the imposition of auto tariffs. Only on Friday, there was still some optimism about Trump showing leniency on tariffs when he signalled that he was open to making deals.

After three hours of trading, European markets are still firmly in the red.

Here’s the current damage:

• UK’s FTSE 100: down 74 points or 0.85% at 8585 points.

• Germany’s DAX: down 286 points or 1.3% at 22,171 points

• France’s CAC: down 109 points or 1.4% at 7,807 points

As flagged in the intro, these losses will cement March as the worst month for markets since 2022.

Russ Mould, investment director at AJ Bell, says:

“Another day, another sell-off on the markets, marking 2025 as one of the most gruelling starts to a calendar year for investors in quite a while.

It’s not all doom and gloom though as some parts of the world are still up year-to-date, including China, Germany and the UK.

Donald Trump continues to be the key reason why markets are having a bad day. He has now threatened to target all countries importing goods into the US with tariffs, further clouding economic prospects around the world. Investors raced for protection by buying gold and defensive stocks including tobacco manufacturers and utilities.

When things are looking bleak, it’s natural for investors to hide in certain parts of the market that either act as safe havens or industries whose demand should be unaffected by fluctuations in the economy.”

Speaking of downturns…..a majority of Britons (53%) expecting that the UK economy will be in a depression or recession this time next year.

That’s according to a new poll from YouGov, just released.

This is the highest level since February 2023 and double the 26% who held a negative outlook last July, just after the Labour Party’s landslide election win.

YouGov explains

Anticipation of a recession is highest among Reform UK voters (78%) and Conservatives (69%), with Lib Dem voters split 41% to 41% and Labour voters divided 37% to 37% over whether the economy will be in a recession in a year’s time or be stable.

Savers would have up to £110,000 of their deposits protected in the event that their bank goes bust, under a new cap being proposed by the Bank of England.

It would represent a 30% hike on the current limit of £85,000, which is protected under post-financial crisis rules run by the Financial Services Compensation Scheme (FSCS).

The BoE’s Prudential Regulation Authority said the increase was meant to account for inflation since the limit was last changed in 2017, and is meant to “give consumers confidence that their money is safe if their UK-authorised bank, building society or credit union fails.”

PRA CEO Sam Woods said:

“Confidence in our financial system is an essential foundation for economic growth. We want to support confidence in our banks, building societies and credit unions by raising the amount that people can keep in their account which is covered by the deposit guarantee scheme to £110,000 per person, so all that money is safe even if the firm fails.”

However, debate over the deposit protection level has been swirling since the mini-banking crisis of 2023, following the collapse of the UK arm of Silicon Valley Bank.

It prompted intense fears that a swathe of start-ups and small businesses could lose their cash and go bust as a result of relatively low deposit protection levels. (SVB UK was subsequently rescued by HSBC for a nominal sum of £1).

The BoE’s consultation, published this morning, explained:

“The events of 2023 in the banking sector, including the failure of Silicon Valley Bank UK Limited, while not requiring FSCS involvement, highlighted the importance of depositor protection in supporting confidence in the financial system.

“Accordingly, the need for robust depositor protection that underpins confidence in the financial system remains a key element of the regulatory framework to minimise the impact of banking failures”

If the Bank of England’s proposals, put forward in a consultation on Monday, are approved, the new limit would cover retail and SME customers of any bank or building society that fails from 1 December 2025 onward.

British airline Virgin Atlantic said it was starting to see some signals that demand was slowing in the United States after a strong start to 2025.

Speaking after the airline reported its latest financial results, chief financial officer Oli Byers said:

“I think we’ve seen very strong trading for the first quarter. In the last few weeks, we have started to see some signals that U.S. demand has been slowing.”

Virgin Atlantic also said it has returned to profitability for the first time since the pandemic last year.

For 2024, Virgin Atlantic posted pretax profit before exceptional items of £20m, up from a pre-tax loss of £139m last year.

As well as hitting stocks, Donald Trump appears to have lifted the oil price.

Crude prices are up around 0.66% this morning, after the US president threatened to impose secondary tariffs on buyers of Russian oil.

Trump told NBC:

“If a deal isn’t made, and if I think it was Russia’s fault, I’m going to put secondary sanctions on Russia.”

Earlier this month Trump appeared to invent the idea of ‘secondary tariffs’, when he annouunced that anyone buying oil from Venezuela would face new tariffs on their sales to the US. Bloomberg have dubbed it “a new economic statecraft tactic”.

The possibility that buyers of Russian oil could be scared off by secondary tariffs, and seek supplies elsewhere, has pushed up the cost of a barrel of Brent crude as high as $74.47 today, a five-week high.

Trump’s warning of possible military action and secondary tariffs against Iran if it did not agree to a deal over its nuclear programme may also have lifted oil.

In a worrying sign, Goldman Sachs believes there’s more danger that the US economy falls into recession this year.

Goldman’s economists now estimate a 35% probability that the US economy enters a recession during the next 12 months, up from 20% previously.

They warned that earnings growth is likely to be weaker this year, and next, than expected, telling clients:

Higher tariffs, weaker economic growth, and greater inflation than we previously assumed lead us to cut our S&P 500 EPS growth forecasts to +3% in 2025 (from +7%) and +6% in 2026 (from +7%).

Swiss bank UBS has cut its forecast for the US stock market’s gains this year.

Having previously forecast the S&P 500 shares index would end the year at 6,600 points (which would have been a 12% gain in 2025), UBS have now cut their end-year target to 6,400 points.

That would still represent quite a recovery after a poor start to the year, which has pulled the S&P 500 down to 5,581 points on Friday night.

Mark Haefele, chief investment officer at UBS Global Wealth Management, explains:

“After considering the effects of tariffs and slower growth data so far in 2025, we now expect 6% earnings per share growth, and we have accordingly reduced our year-end target for the index to 6,400 (from 6,600).

But this also means that there is still meaningful upside for broad US equities by year-end, in our view.”

UBS weren’t alone in forecasting gains on Wall Street this year most brokerages predicted US stocks would have risen by December.

Europe’s main stock indices are a sea of red, as investors react to Donald Trump’s declaration that the reciprocal tariffs he is set to announce this week will include all nations.

Italy’s FTSE MIB index has dropped 1.4%, France’s CAC is down 1%, and Germany’s DAX has lost 0.95%.

Jochen Stanzl, chief market analyst at CMC Markets, says “a selling wave is sweeping across global markets”, adding:

The tariffs imposed by the U.S. government and the fear of new announcements as early as Wednesday are creating a bleak atmosphere on trading floors worldwide. Just last Wednesday, the DAX was above 23,000 points, but it now appears that the index may soon test the 22,000 mark.

The risk appetite seen in the initial weeks of the year has dissipated as investors and asset managers pull back, reduce positions, and refrain from taking on large new ones. The inclination to buy the dips has nearly vanished.

European stock markets are on the slide, dragging the pan-European Stoxx 600 index down to a seven-week low.

The London stock market is open, and shares are sliding.

The FTSE 100 index of blue-chip shares has dropped to a two-week low in early trading, down 72 points or 0.85% at 8585 points.

British Airways parent company, IAG, are among the top fallers, down nearly 3%, along with Associated British Foods (-4%) after it announced that the boss of its Primark division had quit after an “error of judgment”.

Mining stocks are also weaker.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, says:

“The last day of March is spring-loaded with uncertainty on financial markets. Unease about the effect of Trump’s tariffs has been amplified, causing sharp moves at the start of the week. London-listed stocks will not be immune to the tariff fall out, with the FTSE 100 set for a difficult start to the week as investors brace for the debilitating effect of widespread tariffs.

There have been steep falls on indices in Asia as hopes for a more targeted set of fresh duties have evaporated. The President’s comments over the weekend appeared to indicate that blanket new tariffs would be unleashed on Wednesday, a day he’s dubbed ‘Liberation’ day but one which is likely to ensnare many more countries in his punishing trade policies.

While the implications of his comments are still far from clear, he appears determined to target countries which are competitive in a whole range of sectors, to try spark a revival of home-grown industries. But building new manufacturing bases will take years, and much higher costs in the meantime, look set to raise prices and depress economic activity.

The boss of Primark has admitted an “error of judgment” and resigned following an allegation made by a woman about his behaviour towards her in a social environment.

The gold price has hit a new all-time high today, as Donald Trump’s threat of imposing reciprocal tariffs on all countries sparks a rush into save-haven assets.

Gold is up 1% today at $3,116 per ounce, having earlier traded as high as $3,128/oz, adding to its strong gains already this year.

KCM Trade chief market analyst Tim Waterer says:

“Markets’ anxiety levels have been ramping up ahead of the reciprocal U.S. tariff announcements, which is keeping gold in high demand as a defensive play.

“If the tariff announcements this week are not as severe as feared, then the gold price could start to backtrack as profit-taking from the highs may be triggered.”

Gold has gained around 9% during March, which Reuters has calculated would be its best month in a year.

March has also been a grim month for the US dollar.

By my calculations, the dollar is on track for its largest monthly fall against a basket of major currencies since November 2022.

The dollar index has lost around 3.5% so far this month, as anxiety over looming tariffs against America’s trading partners.

New tariffs are likely to disrupt global trade, especially if other countries retaliate against Washington.

But the economic worries run deeper, as Stephen Innes, managing partner at SPI Asset Management, explains:

This isn’t just about trade—it’s about consumer behaviour, capex hesitation, and inflation stickiness all colliding at once.

So far this month, the pound has gained 3% against the dollar to $1.2760.

The euro is up 4.4% against the dollar, to $1.083.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, says:

In summary, the euro is looking stronger than sterling and the dollar, while the US dollar has become the weakest link among the three.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Donald Trump’s trade war is alarming the global markets, sending shares sliding in their worst month in over two years.

Stock markets across the Asia-Pacific region are in retreat this morning, as investors fear Trump will announce swingeing new tariffs on Wednesday, which has been dubbed “Liberation Day” by the US president.

Japan’s Nikkei has lost 3.9%, down 1,457 points at 35,662 points today, while South Korea’s KOSPI is down 3%, Australia’s S&P/ASX 200 has fallen 1.7%. In China, which has already been hit by Trump tariffs this year. the CSI 300 is 0.9% lower.

These are just the latest losses in a bad month for the financial markets. MSCI’s index of global stocks had fallen around 4.5% since the start of March, even before today is priced in, which would be the worst month since September 2022.

Today’s selloff comes after Donald Trump told reporters that the reciprocal tariffs he is set to announce this week will include all nations.

He told reporters on Air Force One:

“You’d start with all countries. Essentially all of the countries that we’re talking about.”

That is a blow to hopes that the White House might only target countries with the largest trade imbalances against the US.

Investors have also been spooked by recent bad economic news from the US.

On Friday, core inflation rose by more than expected, while consumer sentiment weakened to its lowest level since 2022. That drove shares down on Wall Street on Friday, and captured the fears in the markets right now.

Kyle Rodda, senior financial market analyst at capital.com, explains:

The dynamic is a microcosm of the essential fear in the market right now. Trade policy and even merely the uncertainty generated by it is weakening growth but also contributing to sticky inflation, meaning the Fed is going to have marginally less capacity to cut interest rates if (or when) US economic activity starts to falter.

The problem was hammered home further by a revised University of Michigan Consumer Sentiment survey which revealed even higher 1-year inflation expectations of 5% and a greater deterioration in confidence.

The agenda

• 9.30am BST: Bank of England mortgage approvals and consumer credit

• 1pm BST: German inflation rate for March

• 3.30pm BST: Dallas Fed Manufacturing Index for March