Global Stocks Plunge as U.S. Tariffs Shake Tech Sector
Global markets tumbled on Thursday after U.S. President Donald Trump announced a massive increase in tariffs, sending shockwaves through the technology sector and raising fears of a global economic slowdown. Investors rushed to safe-haven assets like bonds, gold, and the Japanese yen as the news unfolded.
The tech-heavy Nasdaq futures dropped 4%, erasing approximately $760 billion from the market value of leading technology companies. Apple shares, heavily impacted due to the company’s manufacturing presence in the Chinese mainland, fell nearly 7% in after-hours trading.
“The U.S. effective tariff rate on all imports looks to be the highest level in over a century,” commented Ben Wiltshire, Citi’s global rates trading strategist. “This unprecedented move is disrupting global trade and supply chains.”
Major indices around the world felt the impact. The S&P 500 futures declined by 3.3%, London’s FTSE futures slid 1.8%, and European futures decreased by nearly 2%. In Asia, Japan’s Nikkei index plummeted 3.9% to an eight-month low, with sectors like shipping, banking, insurance, and exports facing significant losses.
Commodities also reacted sharply. Gold surged to a record high above $3,160 an ounce as investors sought security, while oil prices dropped over 3%, with Brent crude futures settling at $72.56 a barrel.
The bond market saw benchmark 10-year U.S. Treasury yields fall 14 basis points to 4.04%, a five-month low, as investors anticipated slower economic growth and potential interest rate cuts in the coming months.
“The tariffs are so comprehensive and much larger than we expected,” said Jeanette Gerratty, chief economist at Robertson Stephens in Menlo Park, California. “There was hope that clarity would stabilize the markets, but this level of tariffs has caught everyone off guard.”
President Trump’s announcement introduced a baseline 10% tariff on imports, with significantly higher rates imposed on certain trading partners, particularly in Asia. The Chinese mainland faced a new tariff rate of 34%, Japan 24%, Vietnam 46%, South Korea 25%, and the European Union was subjected to a 20% levy.
Asian markets responded accordingly. South Korea’s Kospi index dropped 2%, while Australia’s shares fell 2%. Vietnam’s stock market was hit especially hard, with the VanEck Vietnam ETF falling over 8% in after-hours trading.
“The tariffs announced today pose a significant risk to global trade,” warned Zhiwei Zhang, chief economist at Pinpoint Asset Management in Hong Kong. “They could lead to a slowdown that affects economies worldwide.”
The escalation of tariffs has fueled uncertainty among investors and raised concerns about the future of international trade, particularly in the technology sector that relies heavily on global supply chains.
