INVESTORS dumped stocks worldwide for a fourth day yesterday, ahead of US President Donald Trump unveiling a fresh round of tariffs, and mounting concerns about economic impact from a global trade war.
Stocks fell and investors dashed to shelter in gold and Treasury bonds ahead of Trump’s deadline for a new set of sweeping global trade tariffs.
Stocks dropped from Sydney to Hong Kong, with the Nikkei-225 sinking to the lowest level in more than six months and Taiwan’s benchmark on course for a correction – a drop of 10% from peak level.
Equity-index futures for the US and Europe also slid. Gold touched a fresh record high and US Treasury yields declined.
The risk of tariff-linked damage has propelled the S&P 500 to its worst quarter since 2022, wiping $5 trillion off its value from a February 19 record high.
The Stoxx Europe 600 fell 1.1% as of 8:26am London time. S&P 500 futures fell 0.7%. Nasdaq 100 futures fell 1.1%. Futures on the Dow Jones Industrial Average fell 0.5%. The MSCI Asia Pacific Index fell 2.1%. The MSCI Emerging Markets Index fell 1.5%.
Stock markets in Europe fell in early trading yesterday, following on from steep falls on some Asian markets overnight.
In Frankfurt, the DAX index was down more than 1% in the first hour of trading. In Paris, the CAC40 was down by a similar margin.
Japan’s Nikkei index closed down more than 4%, with carmakers Toyota and Nissan among the biggest fallers.
South Korea’s Kospi was down 3%, while in London the FTSE 100 lost around 1% in early trading.
Money managers around the world are de-risking their portfolios or refraining from taking big positions as they remain wary about the announcement of the so-called reciprocal tariffs and the impact on the economy.
Recent US economic data have shown a plunge in consumer sentiment and a pickup in prices. Goldman Sachs economists now expect the Federal Reserve will cut interest rates three times this year as tariffs weigh on growth and drive up unemployment.
‘All these haphazard and aggressive policy changes that we’ve seen from the Trump administration are having negative economic impacts,’ said Katrina Ell, director of economic research at Moody’s Analytics, ‘And that’s why we’re seeing the rhetoric US recession odds rising quite aggressively. It’s a concerning picture we’re going into.’
Trump said he plans to start his reciprocal tariff push with ‘all countries’, tamping down speculation that he could limit the initial scope of tariffs set to be unveiled tomorrow.
The president, who has touted this as ‘Liberation Day’, escalated his trade war last week by slapping a 25 per cent levy on all cars not made in the US. Reciprocal duties will be ‘very lenient’, he said previously.
Depending on the scale of what’s announced, Bloomberg Economics sees a hit to US gross domestic product and a jolt to prices over the coming years, given the possibility of massive tariff hikes on imports from some countries.
