Global Markets Plunge Amid Rising U.S.-China Trade Tensions
Panic spreads across global stock markets as China responds to U.S. tariffs with significant duties on American goods.
Global markets experienced significant disruption on April 4, 2025, following China's firm response to newly imposed U.S. tariffs.
Beijing announced a 34% tariff on all American imports, effective April 10, intensifying fears of an escalated trade conflict between the world's two largest economies.
European stock markets saw sharp declines, with the Paris stock exchange plummeting by 4.26%, erasing all of its gains for the year.
The Frankfurt and London stock markets fell by 4.95% each, while Milan experienced a 6.53% drop, marking the largest falls since the onset of the COVID-19 pandemic in March 2020. The Swiss exchange decreased by 5.14%, and Madrid's market fell by 5.83%.
In the United States, Wall Street mirrored this downturn, with the Dow Jones Industrial Average dropping 3.94%, the Nasdaq declining by 4.82%, and the S&P 500 falling by 4.70% around 16:30 GMT, after experiencing heavy losses the previous day.
Analysts reported heightened anxiety among investors.
Andreas Lipkow, an independent analyst, noted, "The nerves of investors are currently frayed." Deutsche Bank analysts characterized the recent reciprocal tariff announcements as the most radical shift in global trade policy in decades.
Alexandre Baradez, market analysis manager at IG France, suggested that China’s retaliatory measures signal the beginning of an escalation between the two economic giants.
The economic slowdown appears increasingly likely, according to Gilles Guibout, head of European equities at AXA IM. Markets reacted negatively to remarks made by U.S. Federal Reserve Chairman Jerome Powell, who stated it was "too early to say what the appropriate monetary policy is," implying no imminent changes to interest rates.
The fear of a potential recession in the U.S. and broader implications has been reignited, as highlighted by Guillaume Chaloin, head of equity management at Delubac AM. Oil prices, sensitive to global consumption trends, suffered considerably, with Brent crude falling 6.74% to $65.41 per barrel and West Texas Intermediate (WTI) crude dropping 7.61% to $61.85.
The decline in economic activity suggests reduced industrial production and oil consumption, sending industrial and energy stocks into a downward spiral.
In London, Shell and BP saw declines of 7.47% and 7.43%, respectively.
In Paris, TotalEnergies dropped by 6.24%, while in Milan, Eni lost 4.53%.
In the U.S., Exxon Mobil fell by 4.91%, Chevron by 6.03%, and ConocoPhillips by 8.18% in the same timeframe.
As uncertainty looms, investors turned to traditional safe-haven assets, particularly in the bond market, which has gained favor throughout the trade conflict.
Sovereign borrowing rates fell significantly, indicating increased investor demand.
The U.S. ten-year borrowing rate dropped to 3.93%, down from 4.03% at the previous day’s close.
The German equivalent decreased from 2.65% to 2.57%, while the French rate fell from 3.37% to 3.33%.
In currency markets, traditional safe-haven currencies such as the Japanese yen and Swiss franc gained appeal.
Meanwhile, the banking sector faced declines as falling long-term borrowing rates create adverse conditions for financial institutions.
Morgan Stanley's shares decreased by 6.81%, JP Morgan lost 7.00%, and Bank of America dropped 7.94% around 16:30 GMT.
In Paris, BNP Paribas lost 6.82% and Société Générale fell by 10.45%.
In London, NatWest dropped by 8.64% and Barclays by 7.70%.
On the Swiss exchange, UBS saw a decrease of 5.25%.
Beijing announced a 34% tariff on all American imports, effective April 10, intensifying fears of an escalated trade conflict between the world's two largest economies.
European stock markets saw sharp declines, with the Paris stock exchange plummeting by 4.26%, erasing all of its gains for the year.
The Frankfurt and London stock markets fell by 4.95% each, while Milan experienced a 6.53% drop, marking the largest falls since the onset of the COVID-19 pandemic in March 2020. The Swiss exchange decreased by 5.14%, and Madrid's market fell by 5.83%.
In the United States, Wall Street mirrored this downturn, with the Dow Jones Industrial Average dropping 3.94%, the Nasdaq declining by 4.82%, and the S&P 500 falling by 4.70% around 16:30 GMT, after experiencing heavy losses the previous day.
Analysts reported heightened anxiety among investors.
Andreas Lipkow, an independent analyst, noted, "The nerves of investors are currently frayed." Deutsche Bank analysts characterized the recent reciprocal tariff announcements as the most radical shift in global trade policy in decades.
Alexandre Baradez, market analysis manager at IG France, suggested that China’s retaliatory measures signal the beginning of an escalation between the two economic giants.
The economic slowdown appears increasingly likely, according to Gilles Guibout, head of European equities at AXA IM. Markets reacted negatively to remarks made by U.S. Federal Reserve Chairman Jerome Powell, who stated it was "too early to say what the appropriate monetary policy is," implying no imminent changes to interest rates.
The fear of a potential recession in the U.S. and broader implications has been reignited, as highlighted by Guillaume Chaloin, head of equity management at Delubac AM. Oil prices, sensitive to global consumption trends, suffered considerably, with Brent crude falling 6.74% to $65.41 per barrel and West Texas Intermediate (WTI) crude dropping 7.61% to $61.85.
The decline in economic activity suggests reduced industrial production and oil consumption, sending industrial and energy stocks into a downward spiral.
In London, Shell and BP saw declines of 7.47% and 7.43%, respectively.
In Paris, TotalEnergies dropped by 6.24%, while in Milan, Eni lost 4.53%.
In the U.S., Exxon Mobil fell by 4.91%, Chevron by 6.03%, and ConocoPhillips by 8.18% in the same timeframe.
As uncertainty looms, investors turned to traditional safe-haven assets, particularly in the bond market, which has gained favor throughout the trade conflict.
Sovereign borrowing rates fell significantly, indicating increased investor demand.
The U.S. ten-year borrowing rate dropped to 3.93%, down from 4.03% at the previous day’s close.
The German equivalent decreased from 2.65% to 2.57%, while the French rate fell from 3.37% to 3.33%.
In currency markets, traditional safe-haven currencies such as the Japanese yen and Swiss franc gained appeal.
Meanwhile, the banking sector faced declines as falling long-term borrowing rates create adverse conditions for financial institutions.
Morgan Stanley's shares decreased by 6.81%, JP Morgan lost 7.00%, and Bank of America dropped 7.94% around 16:30 GMT.
In Paris, BNP Paribas lost 6.82% and Société Générale fell by 10.45%.
In London, NatWest dropped by 8.64% and Barclays by 7.70%.
On the Swiss exchange, UBS saw a decrease of 5.25%.
