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Market Commentary - Foreign Markets
08-Apr-2025 10:30

Global Markets Recoil as Trade War Fears Deepen, Nasdaq Recovers Slightly Amid Volatility

The tech-heavy Nasdaq inched up 15.48 points (0.1%) to 15,603.26 after plummeting by more than 5% in early trading, the S&P 500 dipped 11.83 points (0.2%) to 5,062.25 and the Dow slid 349.26 points (0.9%) to 37,965.60.

Stocks continued their decline early on, extending the sell-off from the past two sessions due to concerns over President Donald Trump's new tariffs and potential retaliation from U.S. trade partners. However, the selling pressure eased soon after the market opened. This prompted some traders to buy stocks at discounted prices after major indexes touched their lowest intraday levels in over a year.

The S&P 500 briefly joined the Nasdaq in bear market territory, falling over 20% from its February peak. A rebound followed reports that Trump might pause new tariffs for 90 days, though the White House later denied it. Despite this, traders remained cautious amid ongoing trade war uncertainties. Tensions escalated as Trump threatened a 50% tariff on Chinese goods unless China reversed its 34% tariff on U.S. products and warned of ending talks with China. Meanwhile, White House official Kevin Hassett claimed over 50 countries have reached out to begin negotiations.

Housing stocks finished the day sharply lower, dragging the Philadelphia Housing Sector Index down by 3.6%. commercial real estate stocks were substantially weak, as reflected by the 2.6% plunge by the Dow Jones U.S. Real Estate Index. Utilities, pharmaceutical and telecom stocks notably moved downside while semiconductor stocks rallied driving the Philadelphia Semiconductor Index up by 2.7%. Computer hardware stocks significant moved upwards , with the NYSE Arca Computer Hardware Index jumping by 1.8%.

Asia-Pacific stocks moved sharply lower. Japan's Nikkei 225 Index plummeted by 7.8%, while Hong Kong's Hang Seng Index nosedived by 13.2%. The major European markets also showed substantial moves to the downside. While the French CAC 40 Index plunged by 4.8%, the U.K.'s FTSE 100 Index tumbled by 4.4% and the German DAX Index slumped by 4.1%.

In the bond market, treasuries pulled back sharply after moving substantially higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 17 bps to 4.15%.