Global stock markets plunge as U.S. tariffs spark investor caution

Economy ME

5 days ago

Global stock markets fell across the board on Friday as investors reacted to newly announced U.S. tariffs, mixed corporate earnings, and anticipation over key economic data releases, leading to cautious trading in Asia, Europe, and the United States.
S&P 500 futures
dipped early Friday as traders processed President Trump's updated tariff rates and the latest earnings from major technology companies. Investors are also keenly awaiting the jobs report for July, which is set to be released later in the day. Futures associated with the broad market index decreased by 0.16 percent, while Nasdaq 100 futures fell by 0.23 percent. Futures linked to the Dow Jones Industrial Average dropped by 67 points, or 0.15 percent.
Tech earnings influence
In after-hours trading, shares of Amazon plummeted more than 6 percent after the e-commerce leader provided lower-than-expected operating income guidance for the current quarter. Conversely, Apple shares surged by 2 percent following an earnings and revenue beat. Just hours ahead of the August 1 'reciprocal' tariff deadline, President Donald Trump announced revised duties ranging from 10 percent to 41 percent. Goods that have been transshipped in an attempt to evade the tariffs will incur an additional 40 percent levy, according to the White House.
Market struggles continue
Stocks are coming off a lackluster trading session, which resulted in the S&P 500 recording its third consecutive losing day, as solid earnings from Microsoft and Meta Platforms were unable to lift the broader market. The S&P 500 closed Thursday down 0.4 percent, while the Nasdaq Composite finished slightly lower. Both the S&P 500 and Nasdaq had reached intraday records earlier in the session until the tech-driven rally lost momentum. The 30-stock Dow declined by approximately 330 points, or 0.7 percent.
Upcoming economic indicators
In addition to the effective date of the tariffs, another market catalyst is approaching on Friday. July's jobs report is scheduled for release at 8:30 a.m. ET, and expectations suggest a slowing labor market. Dow Jones estimates predict a 100,000 increase in payrolls, with the unemployment rate expected to rise to 4.2 percent. Despite a tumultuous month for stocks, the major indices managed to close July with gains. The S&P 500 finished the month up 2.2 percent, while the Nasdaq recorded a 3.7 percent increase. The 30-stock Dow achieved a marginal gain of less than 0.1 percent. Week to date, the broad market index is on track for a 0.8 percent loss, while the Dow is down 1.7 percent. The Nasdaq is projected to experience an advance of less than 0.1 percent.
Read more | Stock market today: Fed's meeting, tech earnings reports to shape investor sentiment
Asian markets reflect caution
Asian stock markets mirrored the cautious mood seen in the U.S., opening lower on Friday after President Trump's announcement of new tariffs. Japan's Nikkei 225 slipped by 0.7 percent to 40,797.96, while the broader Topix index stayed almost flat. South Korea's Kospi tumbled 3.5 percent after the tariff news. In Hong Kong, the Hang Seng Index declined, and mainland China's Shanghai Composite lost 0.37 percent to close at 3,560, with a number of stocks in the automotives and pharmaceuticals sectors seeing notable moves. Indian markets were also pressured, with the Sensex dropping more than 250 points and the Nifty 50 index slipping below 24,700 by mid-morning, led down by pharma and IT stocks.
Elsewhere in Asia-Pacific, the CSI 300 and FTSE China A50 both posted losses, as did the S&P/ASX 200 in Australia and the KOSPI 200 in South Korea. The Straits Times in Singapore also traded lower.
European markets decline
European equity markets extended losses in early trading Friday, weighed down by both the global tariff tensions and expectations surrounding key economic data releases. The Euro Stoxx 50 index fell by 1.0 percent to 5,270 points, the DAX in Germany dropped 1.19 percent to 23,778.60, and France's CAC 40 declined 1.22 percent to 7,677.40. U.K.'s FTSE 100 also traded lower. These declines come after a strong start to the year for European equities, though recent performance has lagged as global uncertainty and tariff concerns have taken center stage. Currency market moves continue to influence European performance as well.