Financial markets around the world tumbled after President Trump on Wednesday announced a barrage of new tariffs, with U.S. stock futures pointing to a sharp drop when Wall Street opens for business.
Roughly two hours before the start of trade at 9:30 a.m. ET, futures for the S&P 500 plunged 190 points, or 3.3%, while futures for the Dow Jones Industrial Average and the tech-heavy Nasdaq composite index sank 3% and 4%, respectively.
Overseas markets also slumped in overnight trading. In Asia, Tokyo’s Nikkei 225 index briefly dipped 4%, with automakers and banks taking big hits, before closing down 2.8%, while South Korea’s benchmark Kospi fell 1.1%. In Europe, Germany’s DAX fell 1.7%, France’s CAC 40 in Paris lost 1.8% and Britain’s FTSE 100 shed 1.2%.
Gold prices briefly hit a record high at $3,167 before dipping as investors digested the impact of the White House’s escalating trade war.
“Stocks are sliding in all markets as the world responds to Trump’s worse-than-expected (and absurd) trade war,” equity analyst Adam Crisafulli, head of Vital Knowledge, told investors in a research note.
Mr. Trump said the U.S. would impose a 10% baseline tariff on all U.S. trading partners starting April 5. Four days later, the U.S. is also set to apply reciprocal tariffs on roughly 60 countries.
Although U.S. markets drifted up on Wednesday as investors hoped for more restrained trade policies from the White House, reality is now biting amid concerns that the economy could stall and possibly tip into recession.
“The Trump administration adopted a shock-therapy approach to tariffs, imposing very high tariffs on all its major trading partners.” analysts with Societe Generale said in a report on Thursday.
They added, “These tariffs are undoubtedly worse than some of the worst-case scenarios envisioned earlier, both at the aggregate and economy-by-economy levels. This set of tariffs, if they persist, would very likely tip global trade into recession.”
The Associated Press
contributed to this report.
Alain Sherter
Alain Sherter is a senior managing editor with CBS News. He covers business, economics, money and workplace issues for CBS MoneyWatch.
