A global sell-off in stock markets deepened overnight as President Donald Trump’s decision to postpone tariffs on additional companies failed to lift investor sentiment.
European shares were expected to open lower following a 2.1% drop in Japan’s Nikkei 225 and a 1.8% decline in Australia’s S&P/ASX 200.
These losses came after a difficult day on Wall Street, despite another short-term reprieve from Trump’s 25% tariffs on many imports from Mexico and Canada.
US stocks had rallied on Wednesday after the President announced a one-month delay for car makers, but this boost evaporated on Thursday amid significant losses in technology shares. The S&P 500 fell 1.8%, the Dow Jones Industrial Average dropped 1%, and the Nasdaq Composite tumbled 2.6%, leaving it more than 10% below its December record.
Chris Weston, head of research at Pepperstone, commented, “Confusion reigns around the Trump administration policy agenda.” He added that despite the latest tariff pause, “the lack of consistency to hold policy firm further limits the visibility US businesses have to position margins and to make strategic planning decisions.”
The dollar weakened against major currencies as Trump shifted his tariff strategy. The pound appreciated by 0.2% versus the greenback, nudging it above $1.29, while the euro increased by 0.4% to $1.083. Meanwhile, the Swiss franc reached a three-month high at 88.1 cents.
This decline occurred despite the US president’s decision to delay tariffs on various goods covered by the trade deal between the US, Mexico, and Canada. Kieran Williams of InTouch Capital Markets noted that “the signs that US exceptionalism is on the wane continue to increase,” adding that the uncertainty surrounding the tariff policies has left the dollar increasingly out of favor.
