Shares slid further yesterday after US President Donald Trump’s tariffs sent shudders through Wall Street at a level of shock unseen since the COVID-19 pandemic pummeled global markets in 2020.
Everything from crude oil to technology stocks to the value of the US dollar against other currencies has fallen. Even gold, a traditional safe haven that recently hit record highs, pulled lower after Trump announced his “Liberation Day” set of tariffs, which economists say carries the risk of a potentially toxic mix of weakening economic growth and higher inflation.
In early European trading, Germany’s DAX lost 0.7 percent to 21,568.78, while the CAC 40 in Paris slipped 0.7 percent to 7,547.19. London’s FTSE 100 gave up 0.6 percent to 8,426.10.
Photo: Reuters
Futures for the S&P 500 lost 0.4 percent, while those for the Dow Jones Industrial Average shed 0.5 percent.
The stock markets in Taiwan, Shanghai, Hong Kong and Indonesia were closed for holidays, limiting the scope of yesterday’s sell-offs in Asia.
Tokyo’s Nikkei 225 lost 2.8 percent to 33,780.58, while South Korea’s KOSPI sank 0.9 percent to 2,465.42.
In the two US allies who said they were focused on negotiating lower tariffs with Trump’s administration, Australia’s S&P/ASX 200 dropped 2.4 percent, closing at 7,667.80, while Bangkok’s SET fell 2.6 percent.
In other trading early yesterday, the US dollar fell to ￥145.87 from ￥146.06. The yen is often used as a refuge in uncertain times, while Trump’s policies are meant in part to weaken the US dollar to make goods made in the US more competitive overseas.
The euro edged lower to US$1.1054 from US$1.1055.
Trump announced a minimum tariff of 10 percent on global imports, with the tax rate running much higher on products from certain nations such as Taiwan, China and nations in the EU. Smaller, poorer nations in Asia were slapped with tariffs as high as 49 percent.
It is “plausible” the tariffs altogether, which would rival levels unseen in more than a century, could dent US economic growth by 2 percentage points this year and raise inflation close to 5 percent, UBS said.
Trump has previously said tariffs could cause “a little disturbance” in the economy and markets, and on Thursday he downplayed the impact.
“The markets are going to boom, the stock is going to boom and the country is going to boom,” Trump said as he left the White House to fly to Florida.
The S&P 500 sank 4.8 percent to 5,396.52 and the Dow Jones Industrial Average dropped 4 percent to 40,545.93. The NASDAQ composite tumbled 6 percent to 16,550.61.
Investors knew Trump was going to announce sweeping new tariffs and fears surrounding it had already pulled Wall Street’s main measure of health, the S&P 500 index, 10 percent below its all-time high.
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