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Stocks fall again as Trump tariff jitters continue | Stocks fall again as Trump tariff jitters continue |
(about 1 hour later) | |
Global stocks have slumped further after China hit back at US import taxes with retaliatory tariffs of its own. | |
The main US indexes opened down nearly 3% while European markets were about 4% lower, with some companies seeing double-digit falls in their share prices. | |
The declines add to large falls seen on Thursday as markets continued to react to the uncertainty triggered by the US tariffs. | The declines add to large falls seen on Thursday as markets continued to react to the uncertainty triggered by the US tariffs. |
Traders are concerned the tariffs will increase prices and weigh on growth in the US and abroad. | Traders are concerned the tariffs will increase prices and weigh on growth in the US and abroad. |
The news that China will add a 34% tariff on US goods from 10 April has increased fears of a drawn out trade war. | |
China's finance ministry says the US tariffs on Chinese products are "not in line with international trade rules". | |
When the sweeping new tariffs were announced by US President Donald Trump on Thursday, China was hit with a 54% rate, which include previous duties already in place. That makes China one of the hardest-hit countries on America's tariff list. | |
In the US, the tech-heavy Nasdaq opened down 2.8% on Friday, but it fell into what is known as "bear territory" - that is, it may close more than 20% lower than its recent peak in December. | |
The Dow Jones was more than 2% lower while the S&P 500 fell nearly 3%. | |
Shares in tech giant Apple fell more than 3%, and have dropped 12.5% over two days. It outsources much of its production to China, which faces an aggregate 54% US tariff rate. | |
In Europe, the FTSE 100 index was down 4.6% while in Germany the Dax was 4.4% lower. | |
Live: Follow the latest reaction to the US tariffs | Live: Follow the latest reaction to the US tariffs |
At a glance: What Trump's new tariffs mean for the EU, China and others | At a glance: What Trump's new tariffs mean for the EU, China and others |
Explainer: What are tariffs and why is Trump using them? | Explainer: What are tariffs and why is Trump using them? |
Russ Mould, investment director at AJ Bell, said the "relentless selling" had continued despite investors "hoping the pain would go away". | Russ Mould, investment director at AJ Bell, said the "relentless selling" had continued despite investors "hoping the pain would go away". |
"There are so many moving parts that getting your head around the situation [as an investor] isn't easy," he said. | "There are so many moving parts that getting your head around the situation [as an investor] isn't easy," he said. |
"With countless sectors set to be hit by tariffs, it's difficult to know where to begin to comprehend the situation." | "With countless sectors set to be hit by tariffs, it's difficult to know where to begin to comprehend the situation." |
Jane Sydenham, investment director at Rathbones, said banking stocks, firms with supply chains that were exposed to tariffs, and tech stocks had all been falling. | Jane Sydenham, investment director at Rathbones, said banking stocks, firms with supply chains that were exposed to tariffs, and tech stocks had all been falling. |
Investors had been buying into safe haven assets including gold and government bonds, she said. | Investors had been buying into safe haven assets including gold and government bonds, she said. |
Gold was above $3,121 an ounce on Friday, back near record highs, while bond yields were down, according to Trading Economics. | |
China had been "under severe pressure" to respond to tariffs of 54% on most goods, Ms Sydenham said, and its economy was big enough to be able to take such action. | |
But countries with smaller economies were having to be more cautious, she added. | But countries with smaller economies were having to be more cautious, she added. |
Leah Fahy, China economist at Capital Economics, said the country had "hit back hard" against US tariffs. | Leah Fahy, China economist at Capital Economics, said the country had "hit back hard" against US tariffs. |
She said the "aggressive, escalatory" response "makes a near-term deal to end the trade war between the two superpowers highly unlikely". | She said the "aggressive, escalatory" response "makes a near-term deal to end the trade war between the two superpowers highly unlikely". |
The dollar index, which measures the value of the US currency against six peers, had sunk 1.9% on Thursday, the sharpest drop since November 2022, but on Friday it steadied, rising by 0.35%. | The dollar index, which measures the value of the US currency against six peers, had sunk 1.9% on Thursday, the sharpest drop since November 2022, but on Friday it steadied, rising by 0.35%. |
Oil prices fell sharply as traders worried that the tariffs could slow economic growth and worsen trade disputes. | Oil prices fell sharply as traders worried that the tariffs could slow economic growth and worsen trade disputes. |
The price of a barrel of Brent crude slumped more than 6% to $65.35 a barrel. | The price of a barrel of Brent crude slumped more than 6% to $65.35 a barrel. |
The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, has said the new tariffs "clearly represent a significant risk to the global outlook at a time of sluggish growth". | The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, has said the new tariffs "clearly represent a significant risk to the global outlook at a time of sluggish growth". |
She said the IMF was still looking into the "macroeconomic implications" of the measures and stressed the need to avoid actions that could do more damage to the global economy. | She said the IMF was still looking into the "macroeconomic implications" of the measures and stressed the need to avoid actions that could do more damage to the global economy. |