US Stocks Smashed Again as Tariff Pain Continues – S&P Down 6%
US stock markets were smashed again on Friday, with $5 trillion now having been wiped off the market since President Trump announced his tariff plans on Wednesday. Risk appetite was not helped by a stronger Non-Farms print and less dovish comments from Jerome Powell on Friday. All three of the major indices closed well over 5% down by the close – the Dow off 5.50%, the S&P down 5.97%, and the Nasdaq 5.82% lower. The dollar jumped higher against most of the majors, with the exception of haven currencies Yen and Swiss; the DXY was up 1.01% at 103.02. US Treasury yields finished lower on the day, although the impact was reduced after the stronger jobs number – the 2-year down 3 basis points to 3.652% and the 10-year off 3.4 basis points to 3.994%. Oil prices also crashed further as global growth concerns increased – Brent down 6.50% to $65.58 and WTI down 7.41% to $61.99 a barrel. Gold also fell off its recent highs in line with the stronger dollar, down 2.47% on the day to $3,036.34 an ounce.
Aussie Dollar in Trouble in Risk-Averse Markets
Aussie Dollar traders are preparing for another tough week ahead as markets continue to react to global trade concerns. The Aussie has long been associated as a risk proxy for overall markets, and in recent days its status has come back with a vengeance, as it has collapsed against the dollar and, more significantly, on the crosses. It has dropped over 7% against the greenback from its post-tariff announcement high just under 64 cents to its low this morning just above 59 cents. It has seen similar percentage losses against the Euro (7.45%), Sterling (6.50%), and the Yen (8.19%), and moves this morning on the Asian open do not bode well for any bulls that may remain in the market. Traders will continue to look for levels to sell the Aussie in this environment, however experienced campaigners will also be keeping close eyes on the newswires for any change in tariffs from the US, which could see some sharp relief rallies.
Macroeconomic Calendar Offers No Respite to Market Volatility
Global financial markets have opened the week under intense pressure after another ‘sea of red’ on Wall Street on Friday, and the macroeconomic calendar is offering nothing in the way of respite for a couple of days at least. There are no major economic data or central bank updates due for the first couple of trading days this week, and therefore geopolitical updates and reactions are set to dominate market sentiment. The Asian session today sees the return of Chinese markets after a bank holiday on Friday, and given the moves that we have seen in global markets, as well as the increase in tariff measures, traders are expecting to see a messy start to the day’s trading. The European and US sessions are also set to have a focus on newswires and any tariff updates; however, at the moment, respite for already shocked markets seems a long way off.
