As the morning trading session progresses, the Tokyo Stock Exchange extends its gains by 5.04%, rebounding from the 8% drop recorded yesterday following President Donald Trump’s tariffs. On the currency front, the yen weakens against the dollar to 147.60 and against the euro to 161.20.
The Kospi index on the South Korean Stock Exchange in Seoul opened with a 2.21% gain today, while the Australian Stock Exchange in Sydney recorded a 0.92% increase.
Yesterday’s Market Recap:
Despite hopes for a market turnaround after the global sell-off triggered by President Trump’s tariffs, the markets continued their third day of panic, with Wall Street and tech stocks attempting to limit the damage. However, the losses have been significant, with financial markets burning nearly $10 trillion in three days of sell-offs according to Bloomberg. Asian markets signaled a lack of rebound, with Hong Kong seeing a double-digit drop of 13%. Tokyo, Shanghai, and Shenzhen also experienced significant losses of over 7%.
Wall Street closed mixed after Trump ruled out tariff pauses. The Dow Jones fell by 0.91% to 37,965.60 points, the Nasdaq gained 0.10% to 15,603.26 points, and the S&P 500 lost 0.23% to 5062.25 points.
“Tariffs could be permanent but could also be negotiated,” Trump said in the evening, leaving open both possibilities in his trade war.
European stock markets also fared poorly, with Milan and Madrid leading the declines at 5.1%, followed by Paris and Amsterdam down by 4.7%, London by 4.4%, and Frankfurt losing four points. European markets lost €683 billion by the end of the day, with total losses of €1.924 trillion over three days.
Top executives from some of the world’s largest banks reportedly had a call to discuss the effects of tariffs on financial markets and the global economy. Participants included Bank of America, Barclays, Citi, and Hsbc Holdings.
Goldman Sachs predicts a significant acceleration in China’s fiscal easing measures to offset the impact of additional US tariffs, with a potential decrease of at least 0.7% in Beijing’s GDP by 2025. The bank noted that growth was exceeding expectations before the tariffs were imposed.
In this context, the spread between Italian and German 10-year bonds remained relatively stable at 125 basis points, but European bond yields saw a significant increase towards the end of the session.
The euro held steady at 1.09 against the dollar, while cryptocurrencies, like Bitcoin, declined by about 5% to below $80,000. Energy markets also saw volatility, with oil in New York dropping below $60 and European gas prices fluctuating.
Trump’s Trade Threats and Economic Impact
Donald Trump rules out tariff pauses, emphasizing the necessity of these measures despite growing opposition from CEOs, bankers, donors, and even some Republicans. Global markets continue to suffer amid Trump’s conflicting messages, especially his tough stance on China and the EU.
Trump seems to be escalating his fight against China, the US’s top geopolitical rival, blaming Beijing for scuttling trade deals and imposing harsher tariffs. He also criticized the EU for exploiting the US economically and suggested buying US energy as a way to rebalance trade.
Wall Street heavyweights, including JPMorgan Chase’s Jamie Dimon and Goldman Sachs’ Jan Hatzius, warn of potential inflation, economic slowdown, and threats to US alliances due to the trade war. Even Trump supporters like hedge fund billionaire Bill Ackman express concerns about the market impact on negotiations.
In the evening, Treasury Secretary Scott Bessent hinted at Trump’s readiness to negotiate with affected countries, contradicting earlier statements by White House trade adviser Peter Navarro.
© Copyright ANSA
