Second Wave of Tariffs in Markets: Deeper Losses in Stocks
The mutual tariffs enforced by US President Donald Trump have come into effect. The escalating tension in trade has supported a negative atmosphere in global markets. While stocks continue to decline, gold has once again climbed above $3,000. Meanwhile, oil continues to be priced at its lowest level in four years.
President Trump’s tariff measures have supported a high risk perception in the markets. Tariffs higher than 10% and applicable to approximately 60 countries went into effect. The uncertainty regarding the course of economic tension between the two countries increased after the US administration’s latest tariff move against China. After Trump’s tariff announcement on April 2, many countries showing a willingness to negotiate had also brought along the optimism that supported a tendency of recovery in the markets. Following China’s response of retaliatory tariffs, the announcement of the US increasing its tariffs on China to 104% led to a resurgence of global risks.
Yield-heavy trading dominated the bond markets, with the US 10-year bond yield reaching 4.51% over the last three trading days. The US 10-year bond yield currently stands at 4.49%. The dollar index, on the other hand, dropped by 0.7% to 102.1. Gold, on the other hand, is being sold at $3,010, with a 0.9% increase in its ounce price.
The barrel price of Brent crude oil stands at $60.3, with a 1.8% decrease. Thus, oil continues to be priced at its lowest level in four years.
SELL-OFF IN US STOCK MARKET
The S&P 500 index in New York lost 1.57%, the Nasdaq index lost 2.15%, and the Dow Jones index lost 0.84% yesterday. Index futures in the US started the new day with a negative trend.
ASIA GIVES BACK GAINS
Following a 1.2% drop in China’s leading stocks, the CSI300 index rose by 0.32%. Hong Kong’s Hang Seng index fell by 3.1%. The MSCI index tracking Asia-Pacific markets, excluding Japan, fell by 2%. Japan’s Nikkei index, which yesterday rose by 6% on trade deal expectations, recorded a 4.15% drop today.
MIXED TRAJECTORY IN EUROPE
Yesterday, in Germany, the DAX 40 rose by 2.48%, in France, the CAC 40 index rose by 2.50%, in the UK, the FTSE 100 index rose by 2.71%, and in Italy, the FTSE MIB 30 index rose by 2.44%.
In Europe, index futures started the new day with a mixed trajectory.
