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Global stock markets were in a state of turmoil this morning as massive tariffs go into effect on trade between the U.S. and China. Chinese stocks have stayed relatively bouyant, trading flat. But in the U.S., investors in the S&P 500 continued to take a beating in both yesterday’s trading and this morning in futures contracts. It’s messy in Japan and Europe, too.
China’s CSI 300 index rose by 0.4% today but that was pretty much the only good news in global markets. As of 5:20 a.m. Eastern time, shaky investor sentiment was spreading west. The Euro STOXX 50 was down by 1.7%, while S&P 500 futures were down by 0.4%.
Goldman Sachs warned of another potential global equity drawdown in a note to clients yesterday. “The probability of a further sell-off recently went above 35%,” the note, seen by Fortune, says.
U.S. Treasury yields spiked at times during Asia trading hours, as investors ditched the traditional safe haven. That puts pressure on the Trump administration, which previously cited the shaky bond market for Wednesday’s decision to delay tariffs.
The U.S. Dollar Index fell by 1.4%, with investors going to other currencies like the Japanese yen, the Swiss franc, and the Euro. Gold, another safe haven, also broke past $3,200 an ounce.
“There’s clearly an exodus from U.S. assets. A falling currency and bond market is never a good sign,” Kyle Rodda, senior financial markets analyst at Capital.com, told Reuters. “This goes beyond pricing in a growth slowdown and trade uncertainty.”
Here’s a snapshot of the chaos, from Fortune‘s CEO Daily:
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The S&P 500 dropped another 3.5% yesterday and is now down 10.4% YTD.
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S&P 500 futures were in the red this morning, pre-opening bell.
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By contrast: China’s SSE Composite rose 0.45% today and is down only 0.75% YTD.
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Treasuries are behaving like risk assets. That’s not good, former Treasury Secretary Lawrence Summers says.
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The price of gold—famously a safe haven for investors—hit a new record high.
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The VIX fear index remains at its highest since Covid struck in 2020.
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The dollar is weakening. It has lost 8.34% of its value YTD versus the DXY, an index that tracks a basket of commonly traded currencies.
Friday’s drops follow a steep decline on U.S. stock markets Thursday, as tariff worries continued to weigh on investors despite Trump’s tariff pause earlier this week. The S&P 500 dropped by 3.5%, the worst drop in three years.
Investors are grappling with an escalating trade war and confusing U.S. policy, as the world’s two largest economies hike their tariff rates to staggeringly high levels.
