Stocks slide on tariff jitters

US President Donald Trump’s pledge to implement universal tariffs on all steel and aluminium imports caused commodity currencies, Asian stocks, and cryptos to decline. Markets are set for a risk-off session on Monday as investors remain apprehensive about the escalating trade tensions.

Trump’s remarks came just after German chancellor Olaf Scholz’s assertion that the European Union was prepared to retaliate “within an hour” should the US impose tariffs on European imports.

And, with no indication of progress between Beijing and Washington, China’s retaliatory tariffs on some US exports are set to take effect on Monday. Markets are jittery as tariffs are likely to drive up inflation and further restrict the Federal Reserve’s ability to ease monetary policy.

Stocks, currencies slide on tariff jitters

According to experts, the nations whose currencies Trump is targeting will likely see a decline in value versus the dollar. Investors reacted by pushing the dollar higher. The Australian and Canadian dollars and the Norwegian krone declined after Trump’s comments.

Tariff risks are expected to weigh on the Indian rupee further after the Reserve Bank of India cut rates for the first time since May 2020. The rupee closed at 87.43 on Friday, near its all-time low of 87.58. The Indian currency fell nearly 1 per cent for the week, its worst weekly decline since December 2022.

The Asian MSCI stocks gauge fell by the most in a week, weighed down by Japan’s Nikkei and South Korea’s index. However, Hong Kong and Chinese shares were buoyed by tech stocks. Futures point to lower open in Europe and Wall Street.

In commodities, gold is edging towards a new record. The bullion was last trading around 2,860 dollars per ounce after hitting a new high of 2,886 dollars last week. Even while the dollar is strong, gold prices have risen to record highs, propelled in part by speculation that Trump may slap import taxes on the precious metal.

On the other hand, oil prices have taken a beating due to concerns that a trade war may slow down the world economy and reduce energy demand. Still, the market was due a bounce and ticked higher on Monday after three weeks of losses. The benchmark Brent crude was trading just above 75 dollars a barrel.

(With inputs from the agencies)