Stocks drop ahead of Trump’s Liberation Day tariffs
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The news: European and US stocks slid in early trading on Wednesday, as markets await US President Donald Trump’s announcement of sweeping tariffs on US trading partners.
The numbers: The S&P 500 fell 0.5%, while the Nasdaq dropped 0.6%. The yield on the 10-year Treasury bond retreated for the fourth consecutive day to about 4.12%, the lowest level since early December.
In the UK, the FTSE 100 fell 0.6% in early trading, but outperformed its European peers, including the overall Stoxx 600 Index, which dropped 0.9%. Germany's DAX shed about 1.5%.
The context: Trump is set to announce the ‘reciprocal’ tariffs on foreign nations at the White House at 4pm Wednesday (7:00am Thursday Sydney time).
Business leaders and investors around the globe are bracing to hear the extent of the tariffs, which has ignited fears of a slowdown in economic growth.
What they said: Earlier on Wednesday, European Central Bank head Christine Lagarde said Trump's planned tariffs will be negative across the world. "It will be negative the world over and the density and the durability of the impact will vary depending on the scope, on the products targeted, on how long it lasts, on whether or not there are negotiation."
"Because let's not forget quite often those escalations of tariffs, because they prove harmful, even for those who inflict it, lead to negotiation tables where people actually sit down and discuss and eventually remove some of those barriers."
