After Trump and a flood! Global stock markets tumble, dollar hits new low

Global stocks fell sharply and the US dollar hit a six-month low after Donald Trump announced sweeping tariffs on US global trading partners, The Guardian reports.

Experts expect the sweeping tariffs to cause economic turmoil and a number of supply chain disruptions around the world.

European markets fell broadly on Thursday, April 3, following a sharp sell-off in Asia, while US futures signalled similar declines at the opening on Wall Street.

In London, the FTSE 100 index fell 1.5%, Germany's Dax - by 2.3%, and the French CAC - by 2.5%.

The dollar sank by nearly 2% points against a 'basket' of foreign currencies, including the pound, which rose by more than a cent and a half to $1.3148.

Deutsche Bank sent a message warning its clients to “beware of a crisis of confidence in the dollar“.

Investors in the City of London raised their bets on interest rate cuts by central banks as policymakers try to prevent a global recession. Money markets now see a 92% chance of the European Central Bank cutting euro zone interest rates at its meeting later this month, up from 80% on Wednesday.

The chance of the Bank of England cutting rates in early May has also risen to 77%.

This followed a big sell-off in Asia, where trading partners were hit by some of the steepest tariff hikes on imports from all countries selling to the US, above the base 10%.

Overnight, Japan's Nikkei and Topix indexes fell 3.3% and 3.5% respectively after the US president imposed a 24% tariff on the country. Hong Kong

Overnight, Japan's Nikkei and Topix indexes fell 3.3% and 3.5% respectively after the US president imposed a 24% tariff on the country. Hong Kong's Hang Seng fell 1.9%, while Vietnam's stock market, which was hit by a 46% tariff, plunged 6.7%.

U.S. futures also suffered, with Dow futures pointing to losses of 2.7% and the broader S&P 500 futures down about 3.4%. The technology-focused Nasdaq index fell 3.8% before the market opened.

Nasdaq futures were the worst-hit of the three major markets, down 3.5%, with components such as Apple, which still has a large exposure to China, falling 7%. Nike saw a similar 7.3% plunge, AI chipmaker Nvidia fell 5.6% and Tesla fell more than 8%.

Adam Hatts, portfolio manager at Janus Henderson Investors, said markets were unlikely to calm down anytime soon. Oil prices also fell, with Brent crude down 5.8% to $70.61 a barrel on concerns that the steep tariffs would trigger a global recession by reducing energy demand.

Meanwhile, investors turned to “safe” assets, such as gold, which hit a record high of $3,167.50 overnight.

Tony Sycamore, market analyst at IG, said:

"The tariff rates presented this morning far exceed baseline expectations and if they are not negotiated down quickly, expectations of a US recession will rise dramatically.“