'Medicine' or 'engineering': Is Donald Trump letting global markets crash 'on purpose'?

Indian stock markets opened to a brutal selloff on Monday, with benchmark indices Sensex and Nifty plunging over 5% in early trade, tracking a global market rout sparked by escalating trade tensions.

The BSE Sensex nosedived 3,939.68 points or 5.22% to 71,425.01, while the NSE Nifty fell 1,160.8 points or 5.06% to 21,743.65. Every stock on the Sensex was in the red, with Tata Steel leading the losses, down over 8%, followed by Tata Motors, which dropped more than 7%. Other major drags included HCL Technologies, Tech Mahindra, Infosys, Larsen & Toubro, TCS, and Reliance Industries.

Trump is playing chess while everyone else is playing checkers. pic.twitter.com/fvThLx82Ev

— AmericanPapaBear (@AmericaPapaBear) April 4, 2025

Earlier, Tokyo’s Nikkei 225 plunged over 8%, Hong Kong’s Hang Seng dropped nearly 10%. South Korea’s Kospi fell so sharply it triggered a circuit breaker. Taiwan’s benchmark index was down almost 10%. By midday, the Shanghai Composite had shed more than 6%.

Tariffs, tumbling confidence, and talk of recession

• The S&P 500 plummeted 4.8% Thursday and another 6% Friday, wiping out trillions in value. Nasdaq fell 9.1% over the same two-day stretch.
• In just a few days, the US equity markets have lost more than $6 trillion in value.
• The immediate trigger of this global meltdown was President Donald Trump’s sweeping, unilateral announcement of new tariffs on nearly every US trading partner, including key allies like Japan, Israel, Vietnam, and the European Union. Some rates are as high as 50%. They go into full effect this week.

Zoom in

• Trump’s tariffs are sweeping and unprecedented in scope, hitting both allies and adversaries. Countries facing new levies include China, Israel, Vietnam, India, Japan, and even small US trading partners like Laos and Cambodia. The “baseline” 10% tariff on all imports began Saturday, while higher “reciprocal” tariffs are set to take effect Wednesday.
• Israel faces a 17% tariff, prompting Prime Minister Netanyahu to plan emergency talks with Trump in Washington.
• Vietnam, slapped with a 46% tariff, has asked for a 45-day reprieve to negotiate.
• Trump said he had spoken to leaders from Europe and Asia over the weekend who are seeking to persuade him to reduce tariffs, some of which are set to reach as high as 50% this week. "They are coming to the table. They want to talk but there's no talk unless they pay us a lot of money on a yearly basis," Trump added.
• Italy’s Giorgia Meloni and Canada’s Mark Carney have voiced concern and signaled willingness to respond economically.
• Meanwhile, China has already retaliated with a blanket 34% tariff on US goods, sparking fears of a full-blown trade war.

And then came the video
In the middle of the chaos, Trump posted something else.

On Friday morning, as investors were still processing Thursday’s stock dive, Trump took to his Truth Social platform and reshared a video that claimed—without irony—that he was crashing the market “on purpose.”

“Trump is crashing the stock market… this month, but he’s doing it on purpose,” the video opens. It’s less than a minute long, cobbled together from a TikTok account with fewer than 20,000 followers, and riddled with errors. But it clearly had the president’s attention.

The clip paints Trump as executing a “wild chess move,” crashing the markets to force the Federal Reserve to slash interest rates. That, the theory goes, would allow the US to refinance its $36 trillion debt “very inexpensively.”

If that sounds like a reckless conspiracy theory, consider this: Treasury yields did, in fact, drop after the crash, potentially easing future borrowing. The 10-year note hit a six-month low under 3.9% before rebounding late Friday.

But cheaper debt is a poor consolation if the price is economic instability, rising inflation, and a global loss of confidence in the US economy.

Trump’s reshared video may be fringe in its origin, but it’s not out of step with the message he’s been sending. On Sunday, returning from a weekend of golf, Trump told reporters aboard Air Force One:

It’s a notable shift from the man who once boasted the stock market was a direct reflection of his presidential success. As recently as October, Trump said that if he lost re-election, “the market would go down the tubes.”

Now, he’s treating a market crash as a strategic tool.

‘Taking from the rich’? not quite

• The viral video Trump shared claimed that by hurting the stock market, he was redistributing wealth. “94% of all stocks are owned only by 8% of Americans,” the narrator says, framing the crash as a populist blow against the elite.
• But economists point out that while stock ownership is highly unequal, the majority of Americans are still exposed—mostly through 401(k)s and retirement accounts. The idea that market chaos only hits the rich is a myth.
• More importantly, Trump’s tariffs are projected to increase consumer prices, not lower them. The poorest Americans are likely to be hit hardest.

No, Warren Buffett did not say that
One of the more brazen claims in the video was that legendary investor Warren Buffett supports Trump’s “economic moves.” That’s false. In fact, Buffett’s firm, Berkshire Hathaway, issued a statement calling the claim “completely made up.” Last month, Buffett called tariffs “an act of war” and a “tax on goods paid by the American consumer.”

The Fed, the fiction, and the fallout

• Trump’s Friday post also included a direct call for the Fed to act: “This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates.”
• Powell declined the bait. In prepared remarks, he said the tariff increases would be “significantly larger than expected,” and warned of “higher inflation and slower growth.”
• White House advisers scrambled to distance the administration from accusations of trying to strong-arm the central bank. “There is no political coercion here,” said Kevin Hassett, one of Trump’s top economic aides. But the message from the president—and the markets—isn’t exactly subtle.

What they are saying

• “The president has an opportunity on Monday to call a time out,” wrote hedge fund billionaire and Trump supporter Bill Ackman on X, warning of an “economic nuclear winter” if Trump doesn’t ease the tariff regime.
• Karen Jorritsma, RBC Capital: "Trump got us into this. But what can get us out of it? It's not him, if there's no clear line of sight here to the exit point for this... It's gone too far."
• Jason Wong, BNZ: "Trump's not blinking yet... but there comes a point, when they do capitulate... we need some sort of Trump team response, before the bleeding is going to stop."
• Simon Ward, Mizuho Securities Asia: "We've seen US Treasuries rally... we've seen credit spreads gap wider materially... I think a lot of issuers who have mandates out publicly already are in pause mode."
• John Milroy, Ord Minnett: "All the conversations I have had with clients are more about when do we buy something rather than sell... I have fear for some of those private credit shops as prices and credit spreads swing wildly."
• Robert Pavlik, Dakota Wealth: "People are afraid the worst is yet to come. They're worried about a market crash... leading to a possible depression."
• Angelo Kourkafas, Edward Jones: "Fear is what continues to drive market action... Until we get an off-ramp and some indication... sentiment will remain fragile."
• Charu Chanana, Saxo: "The lack of any policy response from the Trump administration... volatility is likely to stay elevated."
• Sean Callow, ITC Markets: "The only real circuit breaker is President Trump's iPhone and he is showing little sign that the market selloff is bothering him enough to reconsider."
• David Seif, Nomura: "I’m not sure when stocks will find a bottom, but I don’t think stocks are returning to their pre-April 2 levels anytime soon."
• Karl Schamotta, Corpay: "Financial markets are suffering an absolutely brutal selloff... investors are marking down US assets and lowering global growth forecasts even further."
• Aninda Mitra, BNY Investment Institute: "The market may be justifiably concerned but it appears to be pricing in the worst... until there is greater visibility in bilateral negotiations... volatility may stay elevated." (Source: Reuters)

What’s next?
Markets are poised for further volatility as higher tariffs kick in midweek and countries weigh retaliation or concessions.

JP Morgan now estimates a 60% chance of a US recession, projecting GDP contraction of 0.3% for 2025.

Congress is debating bipartisan legislation to curtail presidential tariff powers. Several Republicans have expressed unease, with Senator John Barrasso admitting, “There is concern across the country. People are watching the markets.”

Fed officials face intense political pressure but remain unlikely to make sudden cuts. Powell has emphasized that inflation risks remain high.
(With inputs from agencies)