Stocks Slide as Markets Reel from Trump’s Shifting Tariff Policies

Investors found some relief after a turbulent week marked by uncertainty over U.S. trade policies and rising borrowing costs. The Nasdaq officially entered correction territory, pressured by economic concerns and shifting tariff policies. President Trump temporarily suspended the newly imposed 25% tariffs on Canadian and Mexican goods until April 2, adding to market instability. As a result, investors flocked to safe-haven assets like the Japanese yen, Swiss franc, and gold.

The yen neared a five-month high, while the Swiss franc reached a three-month peak. Gold prices eased slightly but remained close to record highs at $2,904.62 per ounce. Analyst Tony Sycamore warned that the unpredictable trade environment is creating an unstable market. Meanwhile, European bond markets showed signs of recovery after a selloff triggered by Germany’s spending plans. U.S. stocks fell sharply on Thursday, with the Dow, S&P 500, and Nasdaq all experiencing significant losses, including a 2.6% drop for the Nasdaq, confirming its correction status since December. Japanese government bonds also continued their decline, though at a slower pace than in the previous session.

Stocks Slide as Markets Reel from Trump’s Shifting Tariff Policies

Investors found some relief on Friday after a volatile week marked by uncertainty over U.S. trade policy and rising global borrowing costs. A sharp selloff in bonds appeared to be easing, while currency markets stabilized, though stocks continued to follow Wall Street’s downward trend.

Overnight, the Nasdaq (.IXIC) officially entered correction territory since its December peak, as concerns over slowing U.S. economic growth and President Donald Trump’s shifting tariff policies weighed on markets.

On Thursday, Trump announced a temporary suspension of the 25% tariffs he had imposed earlier in the week on most Canadian and Mexican goods, delaying their enforcement until April 2. That date coincides with his broader threat to introduce reciprocal tariffs on all U.S. trading partners, leaving markets on edge.

The uncertainty has driven investors toward safe-haven assets like the Japanese yen, the Swiss franc, and gold. The yen hovered near a five-month high at 147.95, set for a 1.8% weekly gain, while the Swiss franc reached a three-month peak at 0.8822 per dollar. Gold prices slightly retreated but remained close to record highs at $2,904.62 per ounce.

“The unpredictability of U.S. tariffs is creating a highly unstable environment for businesses in the U.S., Canada, and Mexico,” said Tony Sycamore, a market analyst at IG. “Right now, committing money to the market feels risky due to the sheer uncertainty.”

Meanwhile, European bond markets, which had been rattled by Germany’s plans for significant spending, showed some signs of recovery on Friday. Bund futures climbed over 0.8%, while French OAT futures rose 0.7%, signaling a slowdown in the bond selloff.

Trade-related concerns weighed heavily on U.S. equities Thursday, with the Dow slipping 1%, the S&P 500 falling nearly 1.8%, and the Nasdaq dropping 2.6%, confirming its correction status.

In Japan, government bonds continued their decline, although the losses were less severe than in the previous session. Investors remained cautious as rising global borrowing costs and uncertainty surrounding U.S. trade policies weighed on market sentiment. The Bank of Japan’s stance on maintaining its ultra-loose monetary policy has added further complexity, as traders closely watch for any potential shifts in yield curve control measures.

Additionally, concerns over Japan’s economic outlook, including inflationary pressures and slowing exports, have contributed to the cautious mood. Despite the ongoing selloff, demand for Japanese bonds remains relatively stable compared to other markets, as investors assess the potential impact of external economic conditions. The yen’s recent strength has also played a role in influencing bond market movements, adding to overall market volatility.