Global stocks slide again after Trump tariff rout | Australian Markets

Global stocks have slid for a second day on Friday after US President Donald Trump’s sweeping tariff plans wiped $US2.4 trillion off Wall Street equities, sending traders working for canopy in authorities bonds as recession fears gripped markets.

Banking stocks cratered as traders fretted about growth and priced in far more central bank fee cuts, with benchmark 10-year US Treasury yields sliding to their lowest since October after Trump slapped a 10 per cent tariff on most US imports and far larger levies on dozens of nations.

Europe’s STOXX 600 slid 1.1 per cent in early trading on Friday after shedding 2.6 per cent on Thursday.

Japan’s Nikkei 225 slumped 2.8 per cent for a second session working.

Futures for the US S&P 500 fell 0.4 per cent on Friday, pointing to a more contained drop on the open than on Thursday, when the money index plunged 4.8 per cent in its largest one-day fall because the COVID-19 disaster in 2020.

Nasdaq futures had been down 0.3 per cent after the index dropped 5.4 per cent on Thursday.

After years of large inflows into US markets and stellar efficiency by the American financial system, traders are all of a sudden fretting about a reversal in growth

The risk of a US and international recession this yr has risen to 60 per cent from 40 per cent earlier after Trump’s tariff bulletins, JP Morgan mentioned.

Traders on Friday had been pricing in more than 100 foundation factors of Federal Reserve fee cuts this yr, up from round 75 foundation factors on Wednesday, and elevated their bets on Bank of England and European Central Bank reductions too.

Lower rates of interest – which dent lenders’ margins – and worries about growth battered banking stocks, with the STOXX 600 banking index shedding 4.2 per cent in early trading.

HSBC shares dropped 3.2 per cent, UBS fell 2.5 per cent and BNP Paribas slid 3.4 per cent.

That adopted an eight per cent rout for Japanese banks in a single day and a sharp sell-off of Wall Street lenders on Thursday.

Citigroup dropped more than 12 per cent, Bank of America sank 11 per cent and a host of different main lenders suffered comparable falls.

The most evident signal of nerves concerning the health of the US financial system and markets was a 1.9 per cent drop within the greenback index on Thursday, the most important fall since November 2022.

The greenback discovered a footing on Friday, nevertheless, with the euro down 0.5 per cent after rallying 1.9 per cent on Thursday, whereas the pound fell 0.7 per cent.

Japan’s yen, a conventional protected haven, held broadly regular after rallying about two per cent the day prior to this.

The Swiss franc, one other protected haven, perked up about 0.6 per cent.

“The thing that might help markets a little bit is that we get data that suggests that, actually, we are going to get one per cent-plus growth in the US in the last quarter,” mentioned Michael Metcalfe, head of macro strategy at State Street Global Markets.

Metcalfe pointed to US non-farm payrolls information, due later on Friday, as one key information level and retail gross sales figures in two weeks as one other.

As traders continued to hunt for security, 10-year US authorities bond, or Treasury, yields fell 11 foundation factors to three.951 per cent, after sliding 14 foundation factors on Thursday. Yields transfer inversely to costs.

Japanese 10-year authorities bond yields had been set for his or her largest weekly fall – at 37 foundation factors – since 1990 and final traded at 1.175 per cent.