Global Equities Suffer Largest One-Day Drop Since 2020
Global equity markets experienced their steepest single-day declines since 2020 after President Trump’s unexpected announcement of sweeping tariffs on nearly all U.S. imports. The move triggered fears of a full-scale trade war, leading to a broad sell-off. The S&P 500 dropped 4.8%, the Dow fell 4%, and the Nasdaq plunged 6%, with tech stocks bearing the brunt of the losses.
Major tech firms such as Apple, Amazon, and Nvidia saw sharp declines due to their deep reliance on global supply chains. Retailers like Nike and Ralph Lauren also slumped over 14%, as new tariffs were applied to goods from key manufacturing hubs in Asia. Financial stocks took a hit too, with Citigroup shares sliding more than 12%. In contrast, consumer staples provided a rare bright spot as investors shifted into defensive sectors.
Widespread Tariffs Rattle Investors and Raise Recession Fears
The scale of the tariff plan—raising effective rates on all U.S. imports to nearly 25%—surprised many investors. Though the stated goal is to bolster domestic industry and reduce the trade deficit, economists warn the move could have unintended consequences. Tariffs act like a tax on businesses and consumers, likely reducing consumption and deterring investment.
Analysts project the policy could result in a 2.4% hit to U.S. GDP and a 1.4% rise in inflation, stoking fears of stagflation. While the U.S. economy is less export-dependent than other nations, retaliatory tariffs from China and the EU are widely anticipated. Investors are now rotating out of sectors most at risk—particularly those dependent on imported inputs or foreign sales—as uncertainty around the global economic outlook intensifies.
Market Outlook: Volatility Likely to Persist
Volatility is expected to remain elevated until further clarity emerges on the scope and duration of the new trade rules. Countries including India, South Korea, and Mexico have indicated they may seek exemptions or negotiate concessions before the scheduled implementation on April 9.
There is growing speculation that the Federal Reserve could respond to the slowdown with additional rate cuts. Sector exposure remains uneven: technology, industrials, and consumer discretionary stocks are seen as the most vulnerable due to their reliance on global trade. Meanwhile, utilities, real estate, and segments of the financial sector are comparatively insulated. Diversified portfolios—particularly those with international exposure—have weathered the downturn better than those heavily concentrated in U.S. large-caps. A disciplined, long-term investment approach will be key amid ongoing global economic uncertainty.
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Asia Leads Global Sell-Off
Asian markets led Friday’s declines, with Japan’s Nikkei 225 and Australia’s ASX 200 falling to eight-month lows as recession fears deepened. South Korea’s KOSPI dropped 1.5% following the impeachment of President Yoon. Holiday closures in China, Hong Kong, Taiwan, and Indonesia led to subdued volumes across the region.
U.S. Futures Stabilize on Hopes for Trade Talks
U.S. equity futures steadied overnight as sentiment improved slightly after President Trump signaled openness to trade negotiations, following days of heightened market stress due to tariff concerns.
European Equities Slide on Supply Chain Concerns
European markets also came under pressure, with the Stoxx 50 declining 3.7% and the Stoxx 600 falling 2.7%. Elevated tariffs disrupted global supply chains, dragging down shares of companies like Adidas, Maersk, and key automakers. Utilities outperformed as investors moved into traditionally defensive sectors amid rising geopolitical tension.
Bonds Rally Sharply Amid Recession Concerns
The U.S. 10-year Treasury yield dipped below 4% on Friday, marking a six-month low, as investors sought safety. The bond market rallied strongly, with traders now pricing in four Federal Reserve rate cuts this year in response to softening growth and rising trade-related uncertainty.
Dollar Weakens, Oil Extends Losses
The U.S. dollar index stayed below 102 after dropping nearly 2% in the previous session, reflecting investor concerns over trade tensions and economic slowdown. With multiple rate cuts priced in, the euro rose to 1.1089.
Oil prices continued to fall in Asian trading, with Brent and WTI crude extending losses. Market participants are increasingly worried that a combination of rising OPEC+ output and trade-related recession fears could dampen global oil demand.
Equities on the Move
Several stocks made notable moves driven by tariff implications, analyst revisions, or corporate developments:
- Intel & TSMC: Intel and Taiwan Semiconductor Manufacturing Co (TSMC) reached a preliminary agreement on a joint venture, with TSMC acquiring a 20% stake to help improve Intel’s chip manufacturing. The deal follows White House and Commerce Department pressure to revive Intel’s competitiveness in the AI era.
- AppLovin: The company submitted a preliminary bid for TikTok’s non-China assets, amid a tight deadline for securing a non-Chinese buyer. Amazon and a consortium led by OnlyFans founder Tim Stokely are also in the running. Regulatory and geopolitical hurdles remain high.
- Thales: Thales announced plans to hire 8,000 employees in 2025 to support growth in aerospace and defense. Half the hires will be in France and the UK, with 40% in engineering and 25% in industrial roles.
- Microsoft: The company confirmed delays or cancellations of data center projects in Indonesia, the UK, Australia, and the U.S., citing a more cautious investment stance amid uncertainty around AI infrastructure demand.
- Nvidia: HSBC downgraded Nvidia to “Hold” from “Buy” and cut its price target from $175 to $120, citing weaker GPU pricing, supply chain disruptions, and only modest near-term upside as it pivots toward robotics and autonomous vehicle AI.
- Apple: Jefferies projected that Apple’s FY2025 net profit could decline by 14% if the company does not receive tariff exemptions. Rosenblatt estimated the new tariffs could cost Apple $39.5 billion, slashing its operating profit by 32%. Attempts to pass costs to consumers may reduce demand and boost competition from Samsung.
- Goodyear: Shares surged 11.7% as analysts highlighted its strong U.S. manufacturing base and pivot toward high-margin replacement tires. Deutsche Bank upgraded the stock to “Buy” with a $13 price target, citing lower reliance on low-cost imports.
- U.S. Bancorp: Wolfe Research upgraded the bank to “Outperform,” citing an attractive valuation and expected performance gains under new CEO Gunjan Kedia. It raised 2025–2026 earnings forecasts and set a $49 year-end price target, implying 14% upside.
- Block Inc: Morgan Stanley upgraded Block Inc to “Overweight” with a $67 target, citing cost-cutting progress, improving profitability, and resilient small business spending via Square Seller.
- Lyft: Bank of America downgraded Lyft to “Underperform” from “Buy” and lowered its FY2025 EBITDA and price targets. Rising competition from autonomous players like Waymo and Tesla, combined with pricing pressure and California exposure, are key risks.
- PDD Holdings: The company’s international e-commerce platform Temu could face serious disruption following the U.S. decision to remove the de minimis exemption on sub-$800 shipments. Citi analysts warned this may destabilize Temu’s business model, while domestic-focused Chinese companies like JD.com and Meituan are better positioned.
Upcoming Economic Events
Markets are closely watching today’s U.S. jobs report and a scheduled speech from Federal Reserve Chair Jerome Powell. These events could significantly influence market sentiment and shape expectations for future monetary policy.
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