Global stocks slumped Friday as President Donald Trump’s sweeping new import tariffs deepened concerns over global growth and inflation.
S&P 500 futures fell more than 1%, signaling a fourth day of declines. Amazon.com Inc. tumbled up to 8% in premarket trading after underwhelming earnings, injecting caution into an otherwise upbeat Big Tech reporting season.
The dollar and Treasury yields climbed after Trump blasted the Federal Reserve on social media, urging its board to “assume control” if Chair Jerome Powell fails to cut rates. Investors are also bracing for July’s US jobs report, expected later today.
Trump’s plan imposes a 10% global minimum tariff and 15% or higher duties on trade-surplus nations, escalating his bid to rewrite global commerce. The measures have begun to overshadow the AI-driven optimism that had buoyed megacap stocks.
“Next week marks a pivotal shift for global trade,” said Kim Heuacker, associate consultant at Camarco. “High US stock valuations are becoming increasingly tough to justify.”
Europe’s Stoxx 600 dropped over 1% to a one-month low, led lower by pharma names like Novo Nordisk, GSK and AstraZeneca after Trump demanded drugmakers cut US prices. The MSCI All Country World Index declined for a sixth session — its longest losing streak since September 2023.
“The tariffs are really bad for Europe,” warned Ludovic Subran, chief investment officer at Allianz SE. “The cost for companies will be huge, as the US is their biggest market by far.”
Most baseline tariffs remain at 10%, but Trump’s move to hike duties on some Canadian goods to 35% risks straining relations further. Bloomberg Economics estimates the average US tariff will jump to 15.2% under the plan — up from 13.3% now and far above the 2.3% level before Trump returned to office.
Bloomberg strategists caution that seasonal weakness, muted earnings, and a strong euro leave European stocks vulnerable: “Tariffs and soft growth remain major headwinds into year-end,” said Nour Al Ali of Macro Markets & Squawk.
Attention now turns to July’s payrolls report, forecast to show moderating hiring and unemployment ticking up to 4.2%. “With so much uncertainty, it’s natural for traders to take profits ahead of nonfarm payrolls,” said Gareth Nicholson, CIO of Nomura International Wealth Management.