Markets in Turmoil: Trade War Escalation Sparks Sharp Sell-Off Across Assets

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Index Update

U.S. stock futures extended sharp losses Friday, with the S&P 500 and Dow down about 2.5% and Nasdaq 100 off 2.8%, deepening the recent sell-off that pushed the S&P into correction territory. The decline follows China’s retaliatory 34% tariff on U.S. imports, escalating the trade war and fueling recession fears. Megacap tech stocks fell sharply in premarket trading, and all major indexes are set for significant weekly losses. Investors await the U.S. jobs report and Fed Chair Powell’s speech for further direction.

Market Movers

On Thursday, the top gainers were BingEx Limited (+7.8%), followed by Astrazeneca PLC (+4.71%). On the contrary RxSight, Inc (-39.36%) and Five Below, Inc (-20.09%) declined the most the same day.

Commodities Update

Oil prices plunged to their lowest levels since August 2021, with WTI down over 7% to $62 and Brent falling 6.5% below $66, driven by a sharp increase in OPEC+ supply and escalating global trade tensions, including China’s planned 34% tariff on U.S. goods. Gold edged higher above $3,121 amid safe-haven demand, marking a fifth consecutive weekly gain, while silver dropped to $31.50, down nearly 8% for the week, as markets reacted to broad U.S. tariffs and growing fears of a global economic slowdown.

Macro Update

The U.S. 10-year Treasury yield fell 16 basis points to a six-month low of 3.89% as market uncertainty grew following China’s retaliatory 34% tariff on all U.S. imports. The escalating trade tensions have led traders to increase their expectations for Fed rate cuts this year from 75 to 100 basis points. Investors are now focused on upcoming payroll data and a speech by Fed Chair Powell for further clues on economic and policy direction.

Futures Update

U.S. stock futures pointed lower as markets continued to react to President Trump’s sweeping tariff plan, which includes a 10% baseline rate on all imports starting April 5. Major indexes suffered their worst one-day losses in five years, with the Dow falling 4%, the Nasdaq nearly 6%, and the S&P 500 down 4.8%, slipping back into correction territory. Both the Nasdaq and S&P 500 are on track for their worst weekly performances since September 2024, marking six losing weeks out of the last seven. Investor concerns over a global trade war are intensifying, with JPMorgan raising the probability of a global recession to 60% if the tariffs proceed as announced.

Stocks faced a significant drop during trading on Thursday amid concerns about a global trade war sparked by President Donald Trump's tariff announcement. This sell-off drove the Nasdaq and S&P 500 to their lowest levels since August, while the Dow fell to a closing low not seen in nearly seven months. As the session progressed, the major indices continued to decline, ultimately closing near their lowest points of the day. The Nasdaq plummeted by 1,050.44 points, or 6.0 percent, ending at 16,550.61, while the S&P 500 dropped by 274.47 points, or 4.84 percent, to close at 5,396.51. The S&P 500 has retreated from its immediate resistance zone, which increases the likelihood of further declines in the near term, with support identified around 5,252 and resistance at 5,528. Additionally, the 14-period RSI is approaching its midpoint, indicating that a potential pullback may be on the horizon.