Stocks dropped around the world, bonds climbed and gold hit another record high, with traders bracing for President Donald Trump’s tariff announcement that’s heightening concerns of a wider trade war as the economy shows signs of slowing.
From New York to London and Tokyo, equities got hammered as jittery investors kept scaling back risk or rebalancing their portfolios. US stocks are about to conclude their worst quarter compared to the rest of the world since the 1980s — with the market also pummeled by a selloff in the big tech companies that had driven the artificial-intelligence euphoria of the past couple of years.
In a bid for safety, Treasuries continued to outperform. It’s actually the first time since the onset of the pandemic in March 2020 that stocks fell, and bonds rose in a three-month period. The dollar, long a go-to hiding place during market selloffs, has not been acting as such this year. The greenback has dropped against most major currencies, and was set for its its worst start to a year since 2017.
Trump said he plans to start his reciprocal tariff push with “all countries” on April 2, tamping down speculation that he could limit the initial scope of tariffs set to be unveiled April 2.
“Tariffs will likely continue to drive the market discussion,” said Chris Larkin at E*Trade from Morgan Stanley. “Whether tariffs are more or less rigid than expected could go a long way toward shaping the market’s near-term momentum.”
The S&P 500 fell 1%. The Nasdaq 100 slid 1.5%. The Dow Jones Industrial Average fell 0.7%. A gauge of the “Magnificent Seven” megacaps tumbled nearly 3%, with Nvidia Corp. and Tesla Inc. leading losses. Auto stocks took another dive, with tariffs exacerbating worries over the impact on global trade and hits to industry profits.
Wall Street’s “fear gauge” – the VIX – topped 24. The Bloomberg Dollar Spot Index was little changed. Gold topped $3,100 for the first time.
Goldman Sachs Group Inc.’s David Kostin cut his S&P 500 target, and now expects the benchmark to end the year around 5,700 versus his previous estimate of 6,200, citing a higher recession risk and tariff-related uncertainty.
“If the growth outlook and investor confidence deteriorate even further, valuations could decline much more than we forecast,” Kostin wrote in a note. “We continue to recommend investors watch for an improvement in the growth outlook, more asymmetry in market pricing, or depressed positioning before trying to trade a market bottom.”
Stock market traders have their eyes glued to some key technical charts to get a sense of where the market is headed next as the equities rout becomes increasingly intense over fears of trade uncertainty and slowing economic growth.
The S&P 500 Index briefly sank below the first ominous milestone traders were watching at the start of the session — 5,504.65, the most recent intraday low touched on March 13. But the broad equities benchmark quickly reclaimed that level. The question now is whether it stays there.
Technical strategists also recommend keeping an eye on market breadth, looking for more evidence of washed-out conditions. A 10% or less reading in the percentage of stocks trading above their 20-day moving average would be “a good sign of a capitulation,” said Adam Turnquist, chief technical strategist at LPL Financial.
Stocks
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The S&P 500 fell 1% as of 9:30 a.m. New York time
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The Nasdaq 100 fell 1.5%
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The Dow Jones Industrial Average fell 0.7%
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The Stoxx Europe 600 fell 1.5%
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The MSCI World Index fell 1.3%
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Bloomberg Magnificent 7 Total Return Index fell 2.1%
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The Russell 2000 Index fell 1.6%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro fell 0.1% to $1.0815
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The British pound was little changed at $1.2936
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The Japanese yen rose 0.2% to 149.60 per dollar
Cryptocurrencies
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Bitcoin was little changed at $82,562.4
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Ether rose 0.6% to $1,824.74
Bonds
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The yield on 10-year Treasuries declined five basis points to 4.20%
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Germany’s 10-year yield declined three basis points to 2.70%
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Britain’s 10-year yield declined four basis points to 4.66%
Commodities
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West Texas Intermediate crude rose 0.6% to $69.81 a barrel
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Spot gold rose 1% to $3,115.15 an ounce
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