FTSE and Europe in the red as US markets open on a downturn
The latest escalation in Trump’s trade war painted global markets red on Monday.
This new headache came ahead of Trump’s so-called ‘Liberation Day’ on April 2, which has investors bracing for a broad set of fresh tariffs.
The President will slap 25 per cent tariffs on all automotive imports in the US from Wednesday, with more expected to follow.
Shares across the globe tumbled as the President’s latest step of trade aggression triggered yet another sell-off.
The FTSE 100 fell over one per cent by Monday afternoon, with the FTSE 250 down nearly two per cent.
Dow, S&P and Nasdaq suffer ‘Trump Slump’
The Dow slid 300 points as markets opened in the States, before falling over one per cent.
S&P 500 immediately sank by over 1.5 per cent. The Nasdaq exchange fell by over two per cent following market open.
Goldman Sachs predicted trade escalations would stunt US economic growth, with economists anticipating three cuts to interest rates throughout the year.
The investment bank projected inflation would hit 3.5 per cent, which marks a leap from the Federal Reserves two per cent target.
Russ Mould, investment director at AJ Bell, said: “Another day, another sell-off on the markets, marking 2025 as one of the most gruelling starts to a calendar year for investors in quite a while,”
He added: “Donald Trump continues to be the key reason why markets are having a bad day.
“He has now threatened to target all countries importing goods into the US with tariffs, further clouding economic prospects around the world.
As backlash to trade escalations mounted, Trump told NBC news on Sunday that he “couldn’t care” if car prices rise because of tariffs.
“People are going to start buying American-made cars,” he added.
FTSE ‘unable to dodge the latest volley of news’
Mould noted in a mid-day update despite March’s “wobby start” the FTSE 100 continued to “confound both the doubters and those who think that stock markets start and end in New York.”
In the last six months the FTSE 100 has gained around four per cent, despite pullbacks from geopoliticial tensions.
Richard Hunter, head of markets at interactive investor, said: “Despite its performance amid the turmoil as something of a defensive play, the FTSE 100 was unable to dodge the latest volley of news and sunk at the open.”
Commodity producers and banks dragged the index down, with the FTSE 350 Banks index falling nearly two per cent.
This was partially driven by Close Brothers shares sinking nearly nine per cent ahead of the lender’s landmark motor finance hearing set to begin tomorrow. Pets at Home also plunged nearly ten per cent after forecast future troubles in a trading update.
Gold prices hit another record high on Monday as investors retreated to the safety net of the yellow metal. Prices topped $3,100 (£2,395) an ounce.
Meanwhile in Europe, by the mid-afternoon Germany’s Dax and Cac 40 in Paris had lost over 1.5 per cent and Amsterdam’s AEX slumped one per cent.
The woes continued in Asia, with markets across the region marking losses as they closed this morning.
Tokyo’s Stock Exchange the Nikkei 225 dropped over four percent, whilst China’s Shenzhen fell by nearly one per cent.