New York (AFP) – Stock markets plunged Friday as a closely watched US inflation reading heated up amid intensifying concerns over fallout from President Donald Trump’s incoming wave of tariffs. Shares in automakers fell further as they brace for 25 percent US tariffs due to kick in next week along with a raft of “reciprocal” surcharges tailored to different countries.
The market mood has soured over fears that Trump’s plans will trigger tit-for-tat measures that would rekindle inflation, which could put the brakes on interest rate cuts and spark a recession. “Investors remain nervous over the economic repercussions from President Trump’s tariff threats, just days before he unleashes his ‘reciprocal tariffs'” on April 2, said David Morrison, senior market analyst at financial services provider Trade Nation.
In Europe, London just about held the line, closing barely off in the week’s final session. But Paris, Frankfurt, and Milan all slid around one percent. On Wall Street, all three major indexes closed sharply lower, with the Dow tumbling 1.7 percent, the S&P 500 losing 2.0 percent, and Nasdaq diving 2.7 percent. The slide came after official data showed the Federal Reserve’s preferred inflation measure, the personal consumption expenditures (PCE) price index, remained unchanged last month at 2.5 percent.
However, another key figure, core inflation, which strips out volatile food and energy costs, rose more than expected at 2.8 percent in February on an annual basis, up from the month before. “The (PCE) report isn’t devastating, but given the current economic uncertainty and market volatility, investors were looking for reassurance in this report — not something to fan the flames,” said Bret Kenwell, US investment analyst at trading platform eToro.
In Europe, automakers Volkswagen, Renault, and Stellantis, whose brands include Jeep, Peugeot, and Fiat, fared particularly badly. Shares in General Motors and Ford also slumped on Wall Street. Tokyo’s stock market sank 1.8 percent as the world’s biggest carmaker Toyota fell, along with Honda, Nissan, and Mazda. Seoul was off 1.9 percent as Hyundai gave up 2.6 percent.
Uncertainty over Trump’s plans and long-term intentions has led investors to rush into safe havens such as gold, which hit a new record high of $3,085.96 an ounce on Friday. Governments around the world have pushed back on Trump’s tariffs and could announce more countermeasures next week. On Friday, Canadian Prime Minister Mark Carney told Trump that Ottawa will implement retaliatory tariffs to protect its workers and economy, after Washington announces added trade actions on April 2.
Tariff worries also led to falls on stock markets in Hong Kong and Shanghai. Bangkok was in the red when trading was suspended as a powerful earthquake in neighboring Myanmar shook the Thai capital. Investors also kept tabs on Beijing, where Chinese President Xi Jinping met business leaders, pledging the country’s door would “open wider and wider” but also warning of “severe challenges” to the world trading system.
– Key figures around 2035 GMT –
New York – Dow: DOWN 1.7 percent at 41,583.90 points (close)
New York – S&P 500: DOWN 2.0 percent at 5,580.94 (close)
New York – Nasdaq: DOWN 2.7 percent at 17,322.99 (close)
London – FTSE 100: DOWN 0.1 percent at 8,658.85 (close)
Paris – CAC 40: DOWN 0.9 percent at 7,916.08 (close)
Frankfurt – DAX: DOWN 1.0 percent at 22,461.52 (close)
Tokyo – Nikkei 225: DOWN 1.8 percent at 37,120.33 (close)
Hong Kong – Hang Seng Index: DOWN 0.7 percent at 23,426.60 (close)
Shanghai – Composite: DOWN 0.7 percent at 3,351.31 (close)
Euro/dollar: UP at $1.0838 from $1.0796 on Thursday
Pound/dollar: FLAT at $1.2947 from $1.2947
Dollar/yen: DOWN at 149.72 yen from 151.04 yen
Euro/pound: UP at 83.68 pence from 83.38 pence
West Texas Intermediate: DOWN 0.8 percent at $69.36 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $73.63 per barrel
dan-ajb-lth-bys/sst
© 2024 AFP
