(Bloomberg) — Stocks dropped around the world, bonds climbed and gold hit another record high, with traders bracing for President Donald Trump’s tariff announcement that’s heightening concerns of a wider trade war as the economy shows signs of slowing.
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From New York to London and Tokyo, equities got hammered as jittery investors kept scaling back risk or rebalancing their portfolios. US stocks are about to conclude their worst quarter compared to the rest of the world since the 1980s — with the market also pummeled by a selloff in the big tech companies that had driven the artificial-intelligence euphoria of the past couple of years.
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In a bid for safety, Treasuries continued to outperform. It’s actually the first time since the onset of the pandemic in March 2020 that stocks fell, and bonds rose in a three-month period. The dollar, long a go-to hiding place during market selloffs, has not been acting as such this year. The greenback has dropped against most major currencies, and was set for its its worst start to a year since 2017.
Trump said he plans to start his reciprocal tariff push with “all countries” on April 2, tamping down speculation that he could limit the initial scope of tariffs set to be unveiled April 2.
“Tariffs will likely continue to drive the market discussion,” said Chris Larkin at E*Trade from Morgan Stanley. “Whether tariffs are more or less rigid than expected could go a long way toward shaping the market’s near-term momentum.”
The S&P 500 fell 1%. The Nasdaq 100 slid 1.5%. The Dow Jones Industrial Average fell 0.7%.
The yield on 10-year Treasuries slid five basis points to 4.20%. The Bloomberg Dollar Spot Index was little changed. Gold topped $3,100 for the first time.
Goldman Sachs Group Inc.’s David Kostin cut his S&P 500 target, and now expects the benchmark to end the year around 5,700 versus his previous estimate of 6,200, citing a higher recession risk and tariff-related uncertainty.
“If the growth outlook and investor confidence deteriorate even further, valuations could decline much more than we forecast,” Kostin wrote in a note. “We continue to recommend investors watch for an improvement in the growth outlook, more asymmetry in market pricing, or depressed positioning before trying to trade a market bottom.”