The S&P/ASX 200 Index (ASX: XJO) is off to a rough start this week.
The Aussie benchmark index finished in the green four of the five trading days last week, closing on Friday at 7,982.0 points, up 0.6% for the week.
But the index is in hard retreat today, down 1.4% at 7,873.6 points.
As for the three biggest ASX listed companies, Commonwealth Bank of Australia (ASX: CBA) shares are down 1.3%; the BHP Group Ltd (ASX: BHP) share price is down 2.0%; and shares in Aussie biotech giant CSL Ltd (ASX: CSL) are down 0.4%.
Among the handful of ASX 200 stocks in the green today is global packaging company Orora Ltd (ASX: ORA). Orora shares are up 2.3% following a promising update on the French Competition Authority's investigation into the manufacture and marketing of glass packaging in France.
So, what's going on with the broader market sell off today?
What's pressuring the ASX 200 on Monday?
The ASX 200 is following the lead of United States stock markets and heading sharply lower.
On Friday, the S&P 500 Index (SP: .INX) closed down 1.7%, while the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) dropped an even steeper 2.7%.
Tech stocks are also taking a bigger hit in the Aussie markets today, as witnessed by the 2.2% retrace in the S&P/ASX All Technology Index (ASX: XTX).
Drilling straight down to the biggest headwind pulling down the Aussie market today, we arrive at US President Donald Trump.
Namely, Wednesday's looming 'liberation day'.
On 2 April, the Trump administration will likely announce a raft of new reciprocal tariffs on trading partners worldwide. The size and extent of those tariffs remain unknown, and that kind of uncertainty also does little to boost investor sentiment.
Aside from crimping the global economic growth outlook, the sweeping tariffs could reignite inflation. This could well lead to fewer interest rate cuts from the US Federal Reserve than analysts have pencilled in. And it could derail future interest rate cuts from the RBA here in Australia.
What are the experts saying?
Commenting on the Trump tariffs pressuring US stocks and the ASX 200 today, the Bloomberg economics team said:
Our baseline is that the actual tariffs will be substantially lower than the worst-case scenario, that many will be implemented only after investigations, and that some countries will receive exemptions
Still, after the dust settles, effective tariffs on US imports could be around 15% next year, the highest in almost a century. Facing clear upside risks to inflation, the Fed looks set to hold rates steady. The real risk is that, if the labour market does turn, rate cuts will come too late.
Should I sell my ASX 200 shares?
Every investor's situation is obviously unique.
But in general, with the ASX 200 now down 7.9% from its all-time closing high posted on 14 February, investors would do well to take a deep breath and ride out the storm.
Selling after a sizeable retrace is likely to lock in those losses. And with history as our guide, we can be confident that the ASX 200 will again reset new record highs in future days.
Indeed, some companies will have been sold off for no reason other than investor angst, which could provide some excellent buying opportunities.
On trying days like today, investors would do well to recall the following investment advice from billionaire Warren Buffett.
"Embrace what's boring, think long-term, and ignore the ups and downs," Buffett famously advised.
