The International Monetary Fund (IMF) has warned that major geopolitical risks, including trade tensions and tariffs recently announced by U.S. President Donald Trump, could trigger significant corrections in global stock markets and threaten financial stability. In its latest Global Financial Stability Report, the IMF highlights that events such as wars, diplomatic tensions, and terrorism have historically led to an average monthly decline of 1% in global stock prices, with emerging markets experiencing an average drop of 2.5%. International military conflicts, such as Russia's invasion of Ukraine in 2022, have resulted in even larger declines, averaging 5% monthly. The IMF notes that recent increases in risk factors—such as conflicts, wars, military spending, and trade restrictions—have heightened market volatility since 2022. The organization specifically points to the impact of the U.S.-China trade war from 2018 to 2024, with larger-scale tariff announcements causing declines in both countries' stock markets. Kristalina Georgieva, IMF Managing Director, stated that Trump's tariffs represent a significant risk for the global outlook at a time of slow growth, emphasizing the importance of avoiding measures that could further harm the world economy. The IMF urges financial institutions to maintain sufficient capital and liquidity to withstand potential losses from geopolitical risks and recommends incorporating these risks into stress tests and regulatory oversight. The report also emphasizes that economic uncertainty increases so-called market tail risks, raising the chance of extreme, unexpected losses and further increasing the risk of market crashes. The IMF calls for maintaining adequate macroeconomic policy space and international reserves to mitigate adverse effects. It also recommends that emerging markets deepen financial markets and strengthen regulatory frameworks to manage risks from geopolitical crises. The IMF is expected to release its full report during its spring meetings with the World Bank the week of April 21, where Trump's tariff policies are likely to be a central topic. The report also notes that the S&P 500 index has fallen more than 10% since Trump took office in January, gold prices have reached record highs, and U.S. consumer inflation fears are at their highest since 1981, amid recent Wall Street volatility.