- Dollar Weakens, Asian Stocks Drop on Tariff Woes: Markets Wrap
The dollar extended losses after its biggest plunge in three years while stocks and bonds sold off as a worsening
global trade war eroded an already fragile appetite for risk. A gauge of Asian stocks was on track for its third
consecutive week of declines as market relief turned to angst after the White House clarified US tariffs on
China rose to 145%. US Treasuries extended the week’s slide. In a sign investors are seeking havens and non
US alternatives, the euro soared as much as 1.6%, the yen strengthened and gold set a new high. Just a day
after financial markets cheered President Donald Trump’s decision to delay some of his sweeping tariffs, the
selloff suggested skepticism about the planned talks with US trade partners and fear of escalating tensions with
China. The much-vaunted America-first trade — buying up assets that win when the US outperforms the rest
of the world — is reversing on concern that the steepest increase in levies in a century will push the world’s
biggest economy into a recession. - Dow tumbles 1,000 points, wiping out a chunk of Wednesday’s historic rally
Stocks fell Thursday, giving back some of the gains from the historic rally seen in the previous session after
President Donald Trump announced a 90-day reprieve on some of his “reciprocal” tariffs. Investors worried
that even with the short pause on some of the duties, economic activity will be slowed by Trump’s singling out
of China with a much higher rate. The S&P 500 sold off 3.46% and closed at 5,268.05, while the Nasdaq
Composite slid 4.31% to end at 16,387.31. The Dow Jones Industrial Average dropped 1,014.79 points, or 2.5%,
settling at 39,593.66. Notable decliners included Apple and Tesla, which pulled back 4.2% and 7.3%,
respectively. Nvidia lost nearly 6%, while Meta Platforms slipped almost 7%. Losses accelerated after the White
House confirmed to CNBC on Thursday that the cumulative tariff rate on China would actually total 145%. This
consists of the new 125% duty on goods, on top of the 20% rate levied in response to the fentanyl crisis.
Nonetheless, Trump said later in the afternoon that he is not ruling out an extension to the tariff pause. “We’ll
have to see what happens at that time,” Trump said at a Cabinet meeting. - U.S. crude oil falls more than 3% as traders focus on escalating U.S.-China trade war
Crude oil futures fell more than 3% on Thursday, as President Donald Trump’s steep tariffs on China
overshadowed his 90-day pause on higher rates for most other countries. U.S. crude oil fell $2.28, or 3.66%, to
close at $60.07 per barrel, while global benchmark Brent lost $2.15, or 3.28%, to settle at $63.33 per barrel.
Crude prices rallied Wednesday after Trump announced a lower, temporary tariff rate of 10% on most U.S.
trade partners. Trump said he was open to negotiating deals with countries that don’t retaliate. West Texas
Intermediate swung 13% from the session low to close at $62.35 per barrel. But Trump’s decision to increase
tariffs on China, the world’s second-largest economy and biggest crude importer, to an eye-watering 145%
weighed on the market Thursday. “The tariffs on China are now higher — that’s still pretty significant,” said Jim
Burkhard, head of oil market research at S&P Global Commodity Insights. “These negotiations with all these
different countries — can the U.S negotiate with 70 countries all at once? I don’t think the chaos is over.” - Gold hits record high as U.S.-China trade war intensifies, dollar weakens
Gold prices jumped nearly 3% to an all-time high on Thursday, as a drop in the dollar and an escalating trade
war between the U.S. and China drove investors towards the safe-haven allure of the precious metal. Spot
gold climbed 2.5% to $3,158.28 an ounce, after hitting a record high of $3,171.49 earlier in the session. U.S.
gold futures rose 3.3% to $3,179.4. U.S. President Donald Trump said on Wednesday he would temporarily
lower hefty duties on dozens of countries, but ramped up the tariff on China to 125% from 104%. “Gold regains
its safe-haven appeal and gets back on track for new all-time highs,” said Nikos Tzabouras, Senior Market
Analyst at Tradu.com. “However, prospects of deals with trading partners pose a significant risk to gold’s upside
potential, as they could renew pressure on the metal. Additionally, headwinds may arise from pared-back Fed
rate cut bets that can strengthen the dollar.” The dollar index, meanwhile, slipped more than 1% against its
rivals, making gold less expensive for other currency holders. Data on Thursday showed U.S. consumer prices
unexpectedly fell in March, but inflation risks are tilted to the upside after Trump doubled down on China
tariffs. Following the data, traders bet the U.S. Federal Reserve will resume cutting interest rates in June and
probably reduce its policy rate by a full percentage point by the end of the year. “We see central banks buying
(gold), so as long as we see inflows into ETFs and more of the monetary policy risks, there’s a lot of key drivers
that will continue to support gold,” said Alex Ebkarian, chief operating officer at Allegiance Gold. Spot silver was
0.6% lower to $30.84 an ounce, platinum shed 0.7% to $931.78, and palladium slipped 1.6% to $916. - US targets China oil storage terminal in new Iran-related sanctions
The Trump administration imposed sanctions on Iranian oil trading networks Thursday, including on a China
based crude oil storage terminal linked via a pipeline to an independent refinery, just days before direct talks
between the U.S. and Iran. The sanctions came after Secretary of State Marco Rubio said the U.S. will
hold direct talks with Iran Saturday in Oman. President Donald Trump said on Monday that Iran would be in
“great danger” if the talks were unsuccessful. The U.S. imposed sanctions on Guangsha Zhoushan Energy Group
Co, LTD that it said operates a crude oil and petroleum products terminal on Huangzeshan Island in
Zhoushan, China. The terminal knowingly engaged with oil from Iran, and is directly connected through the
Huangzeshan–Yushan Under Sea Oil Pipeline to an independent refinery known as a “teapot” plant, the U.S.
State Department said. “The United States remains focused on disrupting all elements of Iran’s oil exports,
particularly those who seek to profit from this trade,” U.S. Treasury Secretary Scott Bessent said.
The terminal has acquired Iranian crude oil at least nine times between 2021 and 2025, including from U.S.
sanctioned vessels, and has imported at least 13 million barrels of Iranian crude oil, it said. China, the largest
importer of Iranian oil, does not recognize U.S. sanctions. China and Iran have built a trading system that uses
mostly Chinese yuan and a network of middlemen, avoiding the dollar and exposure to U.S. regulators. The
Chinese embassy in Washington did not immediately respond to a request for comment. But in response to a
sanction on a teapot refinery last month, a spokesperson said: “China has always been firmly opposed to illegal
and unjustifiable unilateral sanctions and so-called long-arm jurisdiction by the U.S.” It was Washington’s latest
round of sanctions on Iran since Trump said in February he was re-imposing a “maximum pressure” campaign
including efforts to drive down the country’s oil exports to zero in order to prevent it from getting a nuclear
weapon. Iran says its nuclear program is for civil purposes. - Inflation rate eases to 2.4% in March, lower than expected; core at 4-year low
Consumer price inflation eased more than expected in March as President Donald Trump prepared to launch
tariffs against U.S. trading partners, the Bureau of Labor Statistics reported Thursday. The consumer price
index, a broad measure of goods and services costs across the U.S. economy, fell a seasonally adjusted 0.1% in
March, putting the 12-month inflation rate at 2.4%, down from 2.8% in February. Excluding food and energy,
so-called core inflation ran at a 2.8% annual rate, having increased 0.1% for the month. That was the lowest
rate for core inflation since March 2021. Wall Street had been looking for headline inflation of 2.6% and core
at 3%, according to the Dow Jones consensus. Slumping energy prices helped keep inflation tame, as a 6.3%
drop in gasoline prices helped drive a 2.4% broader decline in the energy index. Food prices climbed 0.4% on
the month. Egg prices rose another 5.9% and were up 60.4% from a year ago. Moreover, shelter prices, among
the most stubborn components of inflation, increased just 0.2% in March and were up 4% on a 12-month basis,
the smallest gain since November 2021. Used vehicle prices were off 0.7% while new vehicle costs increased
just 0.1%, ahead of tariffs that are expected to hit the auto industry hard. - European Union to put countermeasures to U.S. tariffs on hold for 90 days
The European Union will pause its first tranche of retaliatory tariffs on U.S. goods for 90 days, the European
Commission announced Thursday. EC President Ursula von der Leyen said the bloc had taken note of U.S.
President Donald Trump’s own 90-day suspension of the highest rate of his sweeping global tariffs on
Wednesday. “We want to give negotiations a chance… if negotiations are not satisfactory, our
countermeasures will kick in,” von der Leyen said. - Tesla shares retreat following sharpest rally since 2013
Tesla shares slumped on Thursday, reversing course a day after the electric vehicle maker had its biggest gain
on the market since 2013. The stock dropped 7.3% to close at $252.40 and is now down 38% for the year, by
far the biggest decline among tech’s megacap companies. That’s true even after the shares soared 23% on
Wednesday, their second-sharpest rally on record. President Donald Trump sent stocks up on Wednesday after
announcing he would pause steep tariffs for many U.S. trading partners for 90 days to allow for negotiations.
He set a minimum tariff rate of 10% while negotiations take place, but increased the tariff on China. The whole
market has whipsawed on President Trump’s changing plans, but Tesla has been particularly volatile, rising or
falling by at least 5% on 19 different occasions this year. The slump on Thursday came after the White House
clarified that China’s tariff rate now stood at 145%. Beijing announced a reciprocal 84% tariff rate on U.S.
goods, effective April 10. And the EU said it approved reciprocal tariffs on U.S. imports. As questions swirled
about the type of deals the U.S. might strike, analysts at UBS, Goldman Sachs and Mizuho cut their price targets
on Tesla, with all three citing margin impacts of Trump’s auto tariffs. - Tesco shares fell 6.1% after the supermarket chain warned profit would slip due to higher costs and
competition for price-conscious UK shoppers
Britain’s largest grocer expects as much as £3 billion in group adjusted operating profit this year, lower than
the £3.1 billion in the 12 months ended Feb. 22. “We’re seeing a very competitive market,” Chief Executive
Officer Ken Murphy said on a call with reporters. The guidance is set to “give us the flexibility and the firepower
to respond to current market conditions.” Still, Tesco announced a further share buyback worth £1.45 billion,
following a year in which performance slightly exceeded analyst expectations and its own guidance. Tesco had
the biggest jump in market share in March to 28%, much of which came at the expense of Asda, research firm
Kantar said last week. “Fears of a price war that could squeeze profitability have weighed on sentiment across
the sector recently, but it hasn’t materialized yet,” Hargreaves Lansdown analyst Aarin Chiekrie said. - “Magnificent Seven” stocks — Megacap technology titans sold off on Thursday, after rallying during the
prior session following Trump’s 90-day pause on reciprocal tariffs
Tesla was the group’s laggard, shedding 7.3% after Wall Street analysts cut their price targets on the electric
vehicle maker. Meta and Nvidia followed, dropping 6.7% and 5.9% respectively. - Walt Disney and Warner Bros. Discovery stocks fell Thursday after China announced it is cutting imports
of American films. The China Film Administration said that the U.S.’s latest tariff decisions has led to the
move
Shares of Disney and Warner Bros. were down 6.8% and 12.5%, respectively. “The wrong action of the U.S.
government’s indiscriminate tariffs on China is bound to further reduce the favorable impression of domestic
audiences on American films,” the China Film Administration said. - Volkswagen shares fell 7% after the company reported a drop in 1Q profit
Profit tumbled because of one-time charges and the early effects of tariffs, VW said. Jefferies (buy): Analysts
led by Philippe Houchois say 1Q was impacted by one-offs, with preliminary Ebit 30% below VA consensus due
to special effects from CO2, diesel provisions, Cariad restructuring and import duty valuation effects “resulting
in underlying Ebit close to (the quite thin) consensus”. Notes company said US tariff impacts are still not
included in the full-year guidance, which was confirmed. Bernstein (market-perform): Analysts led by Stephen
Reitman say the release was triggered by results being materially below the company-collated analyst
consensus. “We remain skeptical of the group’s self-help measures and the efficacy of the VW brand
restructuring agreement”. PRELIMINARY FIRST QUARTER RESULTS: Prelim revenue EU78 billion, estimate
EU78.56 billion. Prelim 1Q Operating Result About EU2.8B.
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