What’s the ‘Index of Fear’?

Lately, people who invest in companies (like in the stock market) are feeling really nervous. Why? Because they don’t know how bad things might get — and things could get a lot worse.

On Monday, stock markets all around the world – from Japan to Europe to the United States – dropped a lot. In some places, it was a small fall, like 3%. But in others, like Hong Kong, it was more than 13%! That’s a huge drop.

What’s causing all this trouble? One big reason is something called tariffs. That’s when one country adds extra taxes to things it buys from another country. Recently, the US President put big tariffs on things from countries like China, Vietnam, and even small places like Lesotho. That made other countries upset, and now they’re adding their own tariffs back on US products. It’s like a trade fight, kind of like a Cold War – but with money instead of weapons.

Investors (people who buy and sell parts of companies) are scared. They don’t know how these new taxes will affect businesses, jobs, and prices. Some are so worried they’re even selling gold, which is usually something people hold onto when they’re scared.

One rich investor, who’s a big supporter of the President, said these tariffs could even lead to something really bad — an “economic winter.” That means a time when the economy slows way down and people lose jobs or money.

Some smart people who study money, like at big banks (Goldman Sachs and JP Morgan), are saying this could lead to a recession. That’s when the whole economy gets weaker, people spend less money, and businesses make less.

There’s still hope, though. Lots of countries are trying to make deals to stop the fight. But China, which is really important in making products, isn’t giving in yet. Since many things we use every day have parts from China, the whole world might feel the effects.

For a country like India, it’s a good idea to make a smart trade deal soon — and also make sure regular people like farmers are protected.