A powerful financial shockwave, originating on Wall Street, has spread across the Atlantic to hit London’s FTSE 100 index, demonstrating the rapid global transmission of market panic. The crisis ignited by the U.S.-China trade dispute is proving to be a highly contagious event, with no major financial center immune to its effects.
The shockwave was generated by President Trump’s threat of 100% tariffs. This created a massive disturbance in the U.S. market, the epicenter, resulting in a $2 trillion loss. The energy from this initial event did not dissipate; it began to radiate outwards.
London was one of the first international markets to feel the impact. The FTSE 100 fell nearly 1% as the shockwave arrived, with investors there reacting to the same fears that had gripped their American counterparts. The interconnectedness of the global financial system acted as a perfect conductor for the wave of negative sentiment.
The continued negative outlook for U.S. futures suggests that aftershocks are expected. These will likely continue to buffet the London market and others across Europe and Asia. The initial shockwave has set off a period of global market instability that will persist as long as the underlying geopolitical tension remains.
This event is a classic example of global financial contagion. It shows that in today’s world, a political decision in one capital can create an economic tidal wave that washes up on the shores of every continent. The shockwave is spreading, and the full extent of the damage is not yet known.
