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An index of European banking <.SX7P shares fell 4.8% on Monday, falling more than 20% from recent closing high and leaving it on course to confirm it is in a bear market. The decline extended into a third day as U.S. President Donald Trump's sweeping tariffs ignited fears of an all-out trade war and a global economic recession. Together with the losses over the past two trading days, the index had fallen by more than 18% on Monday.

TOKYO (Reuters) -The Bank of Japan said uncertainty over Japan's economy was growing as some firms worried about the hit to profits from higher U.S. duties, a sign that President Donald Trump's sweeping tariffs risk upending a moderate economic recovery. One of the BOJ's branch managers described the Trump-induced turmoil as "unlike any other shock" with the impact on the economy hard to quantify, suggesting the uncertainty will keep the central bank in a holding pattern for the time being. In a quarterly meeting of its regional branch managers on Monday, the BOJ maintained its assessment for all nine regions of the country to say they were either recovering or picking up moderately.

U.S. Federal Reserve Chair Jerome Powell has sent strong messages when he felt they were needed, going on television to pledge maximum support for the economy when the COVID-19 pandemic struck, using a terse 2022 speech for a stern message about inflation, and jumping in to backstop financial markets after the 2023 failure of Silicon Valley Bank. But with Powell and the Fed left guessing just as much as the rest of the world about where President Donald Trump is taking the economy, the Fed chair indicated on Friday this is not the moment for a "Fed put" - Wall Street's term for actions to shore up free-falling stock markets - even as household wealth evaporates with real risks to economic activity. "There's a lot of waiting and seeing going on, including by us, and that just seems like the right thing to do at a time of elevated uncertainty," Powell said, making it apparent the Fed won't be rushing to cut interest rates as it would if there was a crisis calling for an obvious central bank response.

Trump, when asked about sliding markets, said sometimes you have to "take medicine."

SINGAPORE/LONDON (Reuters) -Global credit markets began to come under fire on Monday, driving the cost of insuring against corporate and sovereign default higher, as recession fears rippled across equities, commodities and currencies. Trillions of dollars have been wiped off global stock markets in the last three days, as investors have taken fright at the range and severity of the tariffs unveiled last week by U.S. President Donald Trump. Fears of a sudden global recession have hit asset markets hard and credit, which is often seen as a warning sign that a deeper downward correction may be approaching, is starting to show the strain.

U.S. stocks are swinging Monday following a manic morning where indexes plunged, soared and then sank again as Wall Street tossed around a false rumor about President Donald Trump’s plans for his trade war. Countries are scrambling to figure out how to respond to the tariffs, with China and others retaliating quickly. Trump’s tariff blitz fulfilled a key campaign promise as he acted without Congress to redraw the rules of the international trading system.

A cascade of liquidations might suggest a market turning point, where a price reversal could be imminent due to an overreaction in market sentiment.