The FTSE 100 (^FTSE) and European stock markets saw a downturn on Wednesday as investors braced for the latest round of tariffs set to be announced by US president Donald Trump. With fears of a global trade war intensifying, market sentiment turned cautious ahead of what Trump has called "liberation day." The announcement is scheduled to take place at the White House at 9pm UK time.
Market Reaction to Tariff Threats
Asian markets experienced a volatile session, with investors seeking refuge in safe-haven assets. Gold (GC=F) gained 0.2% to trade at $3,150.90 per ounce after reaching a record high of $3,148.80 the previous day. Market analysts noted increased nervousness as traders awaited further details on the tariffs and potential retaliatory measures from US trading partners.
Ben Bennett, a strategist at Legal & General Investment Management, commented on the situation:
"Nervousness is the dominant sentiment right now. Investors are hoping for some clarity. But tariffs are already weighing on business sentiment, and this will probably feed through into lower global economic activity in the coming months."
European Stock Market Performance
London’s FTSE 100 (^FTSE) fell by 0.4% in early trading, reflecting investor uncertainty. Other major European indices also faced declines:
- Germany's DAX (^GDAXI) dropped 1%
- The CAC (^FCHI) in Paris slid 0.5%
- The pan-European STOXX 600 (^STOXX) was down 0.6%
US Market Outlook
Wall Street was poised for a weak open, with major US stock futures trading in negative territory:
- S&P 500 futures (ES=F) were down
- Dow futures (YM=F) declined
- Nasdaq futures (NQ=F) also fell
Currency Movements
The British pound (GBPUSD=X) saw a slight dip, trading 0.1% lower against the US dollar at 1.2910. Investors remain cautious as uncertainty surrounding trade policies continues to weigh on market confidence.
Conclusion
As global markets react to the prospect of new US tariffs, traders and investors are closely monitoring developments to assess the long-term economic impact. With volatility on the rise and safe-haven assets gaining traction, all eyes will be on Trump's announcement and the potential repercussions for global trade and economic stability.
