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Global stocks fell on Friday as Donald Trump’s latest tariff threats piled further pressure on a market already reeling from a big tech sell-off on Wall Street.
Markets fell across Asia, with Japan’s Nikkei 225 index losing 2.9 per cent, South Korea’s Kospi sliding 3.4 per cent and Hong Kong’s Hang Seng index tumbling 3.3 per cent. Mainland China’s CSI 300 benchmark lost 2 per cent.
The broad Stoxx Europe 600 fell 0.3 per cent, with a 0.3 per cent fall in Germany’s exporter-heavy Dax and a 0.3 per cent decline in France’s benchmark Cac 40 index.
The declines followed a bruising day in US markets as tech stocks led declines, with the Nasdaq Composite closing down 2.8 per cent and the S&P 500 finishing 1.6 per cent lower, wiping out its gains for the year.
“The last days have been painful to a number of investors . . . Trump’s tariff announcement has rattled the already fragile market,” said Mohit Kumar, an analyst at Jefferies.
The S&P has lost 2.5 per cent this week, although US stocks were set for a small rebound on Friday, with S&P 500 futures up 0.3 per cent ahead of the New York market open.
Investors had been blindsided on Thursday by the latest trade salvo from Trump, who said he would impose an additional 10 per cent tariff on Chinese imports and press ahead with levies on Canada and Mexico from March 4.
Despite a barrage of threats since taking office last month, Trump has only imposed a 10 per cent tariff on Chinese imports, but there are signs that the spectre of a trade war has dented consumer confidence in the US, the world’s largest economy.
Confidence this month fell by the most since August 2021, according to a Conference Board Consumer Confidence Index released this week.
The worries about the health of the economy added to investor concerns about valuations in the high-flying tech sector.
Chipmaker Nvidia, the biggest winner from investor enthusiasm for artificial intelligence over the past two years, fell 8.4 per cent after its fourth-quarter earnings beat analysts’ forecasts but still failed to ignite a wider rally.
Nvidia is no longer the electrifying force it was for US stocks for much of the past two years, when its blowout quarterly results often powered the wider market higher.
“Nvidia didn’t save the world,” said Mike Zigmont, co-head of trading at Visdom Investment Group. “The results were great but not so mind-blowingly great that everyone wants to buy more stocks.”
Dutch chipmaking equipment group ASML fell 1.9 per cent in early trading on Friday as the tech sell-off spread to Europe.
Trump’s election victory in November powered US stocks higher on hopes the new administration would enact pro-business economic policies, but the S&P 500 has slipped in recent days as focus has instead turned to the potential threats to the US economy.
Retail investors, who have so often stepped in to buy stocks whenever the market dips, are suddenly gripped by “unease”, according to VandaTrack, a data company that monitors retail trading flows.
“I think to a level this is a healthy correction. There is some profit taking,” said Winnie Wu, an equity strategist at Bank of America. “The market always tries to price a five year story in five days or five weeks.”
The retreat from riskier assets has hit cryptocurrencies hard in recent days. On Friday, bitcoin fell 5 per cent and ethereum shed 6.6 per cent.
The dollar rose 0.1 per cent against a basket of trading partners’ currencies, adding to Thursday’s 0.8 per cent gain.