Stock markets worldwide keep swinging as President Donald Trump’s trade war keeps escalating. The S&P 500 was bobbing between small gains and losses in early trading Wednesday. The index is about 19% below its record set less than two months ago. The Dow Jones Industrial Average was down 170 points, or 0.5%, and the Nasdaq composite was 0.5% higher. Overseas markets were sharply lower. The swings came after Trump’s latest round of tariffs kicked in after midnight, imposing taxes on imports from around the world, and China retaliated with more tariffs of its own. Treasury yields rose sharply.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. stock futures were sinking again in premarket trading after massive U.S. tariffs against China kicked in overnight, followed by China retaliating with a huge tariff increase on U.S. imports. Oil prices tumbled to their lowest level in more than four years and a huge sell-off in U.S. Treasurys sent bond yields soaring.
Futures for the S&P 500 fell 2% before the bell to 4,914.50. If those losses hold and the index closes below 4,915.32, it will be in what investors call a bear market.
Futures for the Dow Jones Industrial Average slid 2.4% and Nasdaq futures slumped 1.8%.
In contrast to the rest of the world, markets in China reversed toward small gains Wednesday after that country responded with an 84% tariff on U.S. goods, in retaliation for U.S. President Donald Trump’s 104% tariffs on the world’s second-largest economy that went into effect at midnight Wednesday.
Beijing also added an array of countermeasures after Trump’s massive tariffs on China kicked in.
“If the U.S. insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end,” the Ministry of Commerce wrote in a statement introducing its white paper on trade with the U.S.
Massive share buybacks by big state-run investment funds and other state companies that often are instructed to support Chinese markets in times of crisis helped boost stock prices.
Hong Kong’s Hang Seng rose 0.7%, while the Shanghai Composite index closed 1.3% higher.
Prices for U.S. crude oil skidded more than 5% to $56.38 per barrel, their lowest level since the February of 2021 when the U.S. and global economies were still emerging from the COVID-19 pandemic. Rapidly falling oil prices often signal investor pessimism about economic growth and can signal a recession ahead.
Brent crude, the European standard, gave back $3.29 to $59.53 per barrel.
A sell-off in long-term U.S. Treasurys compounded the gloom around Trump’s tariffs and the damage they’re expected to cause the global economy. The yield on the 10-year Treasury — normally considered a safe haven during volatile equity markets — jumped 17 basis points to 4.44% early Wednesday.
Delta Air Lines pulled its guidance for 2025 Wednesday as the trade war scrambles expectations for business and household spending and depresses bookings across the travel sector.
“With broad economic uncertainty around global trade, growth has largely stalled,” CEO Ed Bastian said in a statement on Wednesday. “In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control.”
Even though the airline’s profit for the most recent quarter came in better than Wall Street expected, Delta shares were mostly unchanged in premarket trading.
The airline sector has been battered this year as investors, anticipating rising tariffs, put their money elsewhere. Shares are down 41% this year for the nation’s most profitable airline, which is better than rivals American and United.
Shares of pharmaceutical companies were also hit hard in off-hours trading after Trump said Tuesday night that he plans tariffs on pharmaceuticals so that more medications would be made in the U.S.
Pfizer and Merck each lost more than 4%. Most other big drugmakers were down between 2% and 4%, including Johnson & Johnson, Bristol Myers Squib and Eli Lilly.
The escalating global trade war — particularly between the U.S. and China — has sent markets careening this year with uncertainty about how the global economy would hold up to America’s new isolationist trade policy.
Analysts predict that markets will have more swings up and down given uncertainty over how long Trump will keep the stiff tariffs on imports, which will raise prices for U.S. shoppers and slow the economy. If they persist, economists and investors expect them to cause a recession. If Trump lowers them through negotiations relatively quickly, the worst-case scenario might be avoided.
Hope still remains on Wall Street that negotiations may be possible, which helped drive the morning’s rally. Trump said Tuesday that a conversation with South Korea’s acting president helped them reach the “confines and probability of a great DEAL for both countries.”
Trump’s trade war is an attack on the globalization that’s shaped the world’s economy and helped bring down prices for products on store shelves but also caused manufacturing jobs to leave for other countries. Trump has said he wants to narrow trade deficits, which measure how much more the United States imports from other countries than it sends to them as exports.
Markets in Europe also extended their losses, with Germany’s DAX sliding 4.1%. In Paris, the CAC 40 declined 3.9% and Britain’s FTSE 100 gave up 3.8%.
Elsewhere, markets remained gloomy. Japan’s Nikkei 225 closed 3.9% lower, at 31,714.03 and Prime Minister Shigeru Ishiba convened a meeting of top financial ministers to reiterate his call for them to do what they can to mitigate the damage from tariffs to Japanese automakers and other manufacturers.
Taiwan led the losses in Asia, as its Taiex plunged 5.8%. Big Tech industries were among the biggest decliners. Computer chip giant TSMC Corp. dropped 3.8% while iPhone maker Hon Hai Precision Industry plunged 10%.
In India, the Sensex declined 0.5% as the central bank cut its benchmark interest rate, while Bangkok’s SET shed 0.8%.
South Korea’s Kospi lost 1.7% to 2,293.70, and the government said it would provide help for its beleaguered automakers. The S&P/ASX 200 in Australia declined 1.8% to 7,375.00. Shares in New Zealand also fell.
Stock markets worldwide keep swinging as President Donald Trump’s trade war keeps escalating.
BANGKOK – World shares slumped on Wednesday after U.S. President Donald Trump’s latest tariff hikes took effect and he threatened to add still more.
Uncertainty is running high about what Trump will do next in his trade war. In a speech Tuesday night he said plans tariffs on pharmaceuticals so that more medications would be made in the U.S.
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European markets extended their losses. Germany’s DAX slipped 2.5% to 19,762.13. In Paris, the CAC 40 declined 2.6% to 6,917.13. Britain’s FTSE 100 gave up 2.6% to 7,704.82.
Although Trump’s latest tariffs include a massive 104% levy on U.S. imports of Chinese products, markets in China reversed early losses, gaining ground on Wednesday.
Massive share buybacks by big state-run investment funds and other state companies that often are instructed to support the market in times of crisis helped boost stock prices. Investors also are expecting the government to step up spending and other measures to help counter the impact of the tariffs, which will hit hardest the small manufacturers and traders that create the most jobs.
Beijing issued a policy paper Wednesday reiterating China’s right to protect its businesses with unspecified countermeasures, while it emphasized it preferred to resolve trade issues through dialogue.
The paper also argued that taking into account trade in services and U.S. companies’ operations in China, economic exchange between the two countries is “roughly in balance.”
Hong Kong’s Hang Seng rose 0.7%, while the Shanghai Composite index closed 1.3% higher.
Thailand’s benchmark also rose, apparently due to speculation that Beijing might be preparing to hold talks with the Trump administration. The unconfirmed rumors helped push the future for the S&P 500 up 0.3%, while that for the Dow was unchanged.
Elsewhere, markets remained gloomy. Japan’s Nikkei 225 closed 3.9% lower, at 31,714.03 and Prime Minister Shigeru Ishiba convened a meeting of top financial ministers to reiterate his call for them to do what they can to mitigate the damage from tariffs to Japanese automakers and other manufacturers.
Taiwan led the losses in Asia, as its Taiex plunged 5.8%. Big tech industries were among the biggest decliners. Computer chip giant TSMC Corp. dropped 3.8% while iPhone maker Hon Hai Precision Industry plunged 10%.
In India, the Sensex declined 0.5% as the central bank cut its benchmark interest rate, while Bangkok’s SET shed 0.8%.
South Korea’s Kospi lost 1.7% to 2,293.70, and the government said it would provide help for its beleaguered automakers. The S&P/ASX 200 in Australia declined 1.8% to 7,375.00. Shares in New Zealand also fell.
On Tuesday, the S&P 500 dropped 1.6% after wiping out an early gain of 4.1%. That took it nearly 19% below its record set in February. The Dow Jones Industrial Average dropped 0.8%, while the Nasdaq composite lost 2.1%.
Stocks had rallied globally on Tuesday, with indexes up 6% in Tokyo, 2.5% in Paris and 1.6% in Shanghai. Any optimism or buying enthusiasm appeared to have dissipated by the time the sharply higher tariffs became reality.
Analysts say the markets will have more swings up and down given uncertainty over how long Trump will keep the stiff tariffs on imports, which will raise prices for U.S. shoppers and slow the economy. If they persist, economists and investors expect them to cause a recession. If Trump lowers them through negotiations relatively quickly, the worst-case scenario might be avoided.
Hope still remains on Wall Street that negotiations may be possible, which helped drive the morning’s rally. Trump said Tuesday that a conversation with South Korea’s acting president helped them reach the “confines and probability of a great DEAL for both countries.”
Trump’s trade war is an attack on the globalization that’s shaped the world’s economy and helped bring down prices for products on store shelves but also caused manufacturing jobs to leave for other countries. Trump has said he wants to narrow trade deficits, which measure how much more the United States imports from other countries than it sends to them as exports.
In other dealings early Wednesday, U.S. benchmark crude oil fell $2.43 to $57.15 per barrel. Brent crude, the international standard, shed $2.47 to $60.35 per barrel.
The U.S. dollar fell to 145.22 Japanese yen from 146.29 yen. The euro rose to $1.1036 from $1.0995.
The price of gold rose $72 to $3,062 an ounce.
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