Ongoing ructions in the global trade order continued to whip stock markets around as investors remain on edge as to where the tariff war is going.
Stocks on Wall Street waxed and waned as the White House poured cold water on headlines of a potential pause in US President Donald Trump’s tariff regime, something institutional investors such as Bill Ackman – a vocal Trump supporter – urged in a post on the X social media platform. The S&P 500 fell 0.4% in afternoon trading.
Trump said he’s not considering pausing the tariff regime, but is open to cutting “fair deals” in country-by-country negotiations.
Apple was down 5.1% in afternoon trading after the Wall Street Journal reported the iPhone maker plans to lean more heavily on Indian manufacturing to offset tariffs in China.
Trump threatened an additional 50% tariff on China if the world’s second-biggest economy doesn’t back down from its retaliatory import levy
“Financial markets have been wild overnight, with extreme volatility due to poor liquidity conditions and not helped by an active session by President Trump on his social media account, including the threat of an additional 50% tariffs against China,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “With China already about to face average US tariffs close to 70%, which will all but annihilate trade with the US, the threat of further Chinese tariffs is hollow and Trump may as well threaten tariffs of a million percent – the tariff rate becomes irrelevant after a certain level.”
Meanwhile, the US and Japan agreed cabinet-level officials will lead trade negotiations and Trump ordered a review of Nippon Steel’s blocked acquisition of US Steel. US Treasury secretary Scott Bessent will lead the trade negotiations with Japanese prime minister Shigeru Ishiba.
Across the pond
Stocks in Europe extended their declines in the turmoil, with Britain’s FTSE 100 down 4.4% and Germany’s DAX 30 declining 4.1%.
The European Commission said it’s offered a zero-for-zero tariff deal with the US, with the bloc prioritising negotiations. It’s proposed counter-tariffs of 25% on a range of US goods, according to a Reuters report.
The market ructions are expected to carry over into the antipodes, with Australian futures pointing to another 0.6% decline for the S&P/ASX 200 index, while the kiwi dollar fell to 55.29 US cents at 7am in Auckland from 55.71 cents yesterday.
That volatility has raised the prospect of some deals falling through, with the Australian Financial Review’s Street Talk column reporting that Bain Capital and CC Capital are reviewing their pursuit of ASX-listed Insignia Financial.
Meanwhile, Virgin Australia’s planned initial public offering appears to still be on the cards.
Local data today include the New Zealand Institute of Economic Research’s quarterly survey of business opinion, although that will capture the pre-tariff sentiment.
Wednesday’s Reserve Bank policy review is the major domestic event this week, and is expected to deliver a quarter-point cut to the official cash rate, lowering it to 3.5%.
Market pricing has raised the chance of deeper cuts later this year, fully pricing in a reduction to 2.75% by November.
Reporting by Paul McBeth. Image from Uwe Conrad on Unsplash.
