A summary
A quick recap…
It’s turning into another very volatile day in the financial markets, as investors grow more fearful that Donald Trump’s trade war will trigger a recession.
European stock markets are in the red in late trading, with the FTSE 100 index down 2.5%, or 205 points, at 7849 points.
Germany’s DAX is down 3.5% in early trading, while France’s CAC has lost 4%.
It’s been a roller-coaster rise on Wall Street – stocks initially plunged, but then rocketed higher following a report that Trump was considering a 90-day pause to many of his new tariffs.
However, that rally fizzled out as the White House denied this claim.
So was that 90-day tariff pause tweet (now proven entirely false) the largest fake news-driven market swing in market history?
— Rory Johnston (@Rory_Johnston) April 7, 2025
INSANE market action right now. Market exploded higher on a headline attributed to Kevin Hassett. And now nobody can figure out where it came from and the markets are diving again.
An 8% surge and then a 3.5% plunge in a matter of seconds pic.twitter.com/HAcWqgrrch
— Joe Weisenthal (@TheStalwart) April 7, 2025
Goldman Sachs added to the pressure on the White House, by raising the chances of a US recssion to 45%.
JP Morgan’s chief executive, Jamie Dimon, warned that it may be “hard to reverse” the effect of Donald Trump’s tariffs, which he said would drive prices higher and make a US recession more likely.
Donald Trump supporter and billionaire fund manager Bill Ackman has said the president is losing the confidence of business leaders and should pause his trade war – which could cause an economic collapse while damaging his supporters the most.
Key events
Trump threatens China with additional 50% tariffs if its measures are not withdrawn
President Donald Trump has threatened further tariffs on China if Beijing does not withdraw retaliatory measures, increasing trade war concerns.
On his Truth Social network, Trump posted:
Yesterday, China issued Retaliatory Tariffs of 34%, on top of their already record setting Tariffs, Non-Monetary Tariffs, Illegal Subsidization of companies, and massive long term Currency Manipulation, despite my warning that any country that Retaliates against the U.S. by issuing additional Tariffs, above and beyond their already existing long term Tariff abuse of our Nation, will be immediately met with new and substantially higher Tariffs, over and above those initially set.
Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th.
Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately. Thank you for your attention to this matter!
Branson calls Trump’s tariffs a ‘colossal mistake’
Richard Branson has posted on X describing Donald Trump’s tariffs as a “colossal mistake” and has called on the president to reverse his decision.
America could be left “facing ruin for years to come”, he said.
He posted:
The ongoing market response to last week’s US tariff announcement was both predictable and preventable.
Even if you agree with the premise of these tariffs, every reasonable effort should be made to give US companies sufficient time to adapt.
The billionaire added:
This is the moment to own up to a colossal mistake and change course.
Otherwise, America will face ruin for years to come
A summary
A quick recap…
It’s turning into another very volatile day in the financial markets, as investors grow more fearful that Donald Trump’s trade war will trigger a recession.
European stock markets are in the red in late trading, with the FTSE 100 index down 2.5%, or 205 points, at 7849 points.
Germany’s DAX is down 3.5% in early trading, while France’s CAC has lost 4%.
It’s been a roller-coaster rise on Wall Street – stocks initially plunged, but then rocketed higher following a report that Trump was considering a 90-day pause to many of his new tariffs.
However, that rally fizzled out as the White House denied this claim.
So was that 90-day tariff pause tweet (now proven entirely false) the largest fake news-driven market swing in market history?
— Rory Johnston (@Rory_Johnston) April 7, 2025
INSANE market action right now. Market exploded higher on a headline attributed to Kevin Hassett. And now nobody can figure out where it came from and the markets are diving again.
An 8% surge and then a 3.5% plunge in a matter of seconds pic.twitter.com/HAcWqgrrch
— Joe Weisenthal (@TheStalwart) April 7, 2025
Goldman Sachs added to the pressure on the White House, by raising the chances of a US recssion to 45%.
JP Morgan’s chief executive, Jamie Dimon, warned that it may be “hard to reverse” the effect of Donald Trump’s tariffs, which he said would drive prices higher and make a US recession more likely.
Donald Trump supporter and billionaire fund manager Bill Ackman has said the president is losing the confidence of business leaders and should pause his trade war – which could cause an economic collapse while damaging his supporters the most.
Kalyeena Makortoff
The turmoil in financial markets today has overshadowed a co-ordinated push by UK regulators to show they are responding to chancellor Rachel Reeves’ demand for them to help spur economic growth.
On Monday, the FCA announced it was planning to loosen rules for more than 600 hedge funds, private equity and venture capital firms in a move that it says will “make it easier for firms to enter the market, grow, compete and innovate.”
The City regulator said it was looking to raise the threshold at which funds are subject to main rules for the sector, meaning they will only apply to those with more than £5bn under management (compared to €100m previously).
That will mean take the number of firms facing more burdensome administrative from around 699 to just 64, its consultation paper suggested.
It comes as regulators come renewed pressure to support UK growth. In the City, this has so far meant easing rules on the financial services sector, with Reeves having also encouraged more risk-taking across the industry.
The CEO of private equity lobby group, the BVCA, welcomed the move, saying:
“More effective, less burdensome regulation will make the UK private capital industry more globally competitive and help it to boost investment from the UK and international investors into growing British businesses.
Elsewhere, the Competition and Markets Authority (CMA) cheered the fact that new consumer protection rules had come into force, which ban fake reviews and drip pricing – where fees are added to the displayed price. The CMA will also be able to decide whether laws have been breached, and decide on compensation and fines, without having to go through the courts.
Ofwat, too, has tried to have a moment in the sun, telling water companies to build new reservoirs and other major projects more quickly in the coming years. In a letter to water company bosses, the watchdog said they must find ways to “deliver (projects) more efficiently, effectively and achieve earlier completion”.
Here’s a chart showing how US stocks jumped following that dubious report that Donald Trump was considering a 90-day pause to tariffs, but then fell back as the reports were dismissed.
White House: reports Trump considering 90-day pause is fake news’
The White House says any suggestion that President Donald Trump is considering a 90-day pause in tariffs is “fake news,” CNBC reports.
A quick recap: Markets volatile on hopes of tariff delay
We’ve just seen a wild few minutes in the financial markets, following a confusing report about a possible delay to Trump’s tariffs.
After plunging in early trading, Wall Street surged into positive territory. A few minutes ago the S&P 500 index was UP by 1.76% at 5,163 points, a gain of 89 points. However, that rally has now petered out again.
The Dow Jones industrial average jumped too – it was briefly up 1.44%, or 551 points, at 38,866 points, having been DOWN over 1,000 points in early trading.
But that rally has fizzled out too, leaving the Dow down 747 points (for the next few seconds, anyway).
This dizzying roller-coaster follows a suggestion on CNBC that White House economic advisor Kevin Hassett has, apparently, suggested that Donald Trump is considering a 90 day pause on tariffs for all countries other than China.
the Dow turns positive as CNBC talks about reporting that Kevin Hassett is saying Trump is considering a 90 day pause on tariffs for all countries other than China pic.twitter.com/ODJOsGVqWU
— Aaron Rupar (@atrupar) April 7, 2025
That would obviously be a game-changer for the markets, and bolster hopes that negotiations might lead to reductions in the large tariffs announced by Trump last week.
However, we haven’t yet managed to stand up exactly what Hassett has said on this point. He WAS asked about the possibility of a 90-day pause on Fox News earlier, but he didn’t explicitly say it was under active consideration.
KILMEADE: Would Trump consider a 90 days pause in tariffs?
HASSETT: I think the president is gonna decide what the president is gonna decide … even if you think there will be some negative effect from the trade side, that’s still a small share of GDP pic.twitter.com/3KymvgOwQG
— Aaron Rupar (@atrupar) April 7, 2025
Stocks had briefly bounced back in London too, but the FTSE 100 is currently down 214 points or -2.6% today at 7842 points.
Global bank chiefs hold talks over Trump tariffs crisis
The chief executives of some of the world’s biggest banks have reportedly held private talks about the carnage in financial markets and the global economy precipitated by President Donald Trump’s new tariffs.
Sky News has learnt that bosses from lenders including Bank of America, Barclays, Citi and HSBC Holdings held a call on Sunday to discuss the ongoing chaos as plunging equity markets reflect fears of a worldwide recession.
Thet add:
Sources said that Sunday’s call was convened by the Bank Policy Institute, a Washington-based public policy group.
Brian Moynihan of BoA, Barclays’ CS Venkatakrishnan and Georges Elhedery of HSBC were among those who took part in the call, according to one overseas bank executive.
Exclusive: The CEOs of some of the world’s biggest banks, including Bank of America, Barclays and HSBC, have held private talks about the economic and markets fallout from President Donald Trump’s tariffs blitz amid growing fears of a global recession. https://t.co/Drju7fKBNg
— Mark Kleinman (@MarkKleinmanSky) April 7, 2025
The current stock market turbulence is “a huge worry”, Professor Costas Milas of the University of Liverpool’s Management School, tells us.
Prof Milas suggests there’s a possibility that central banks might need to take action, if the market turmoil continues, which would set an unfortunate precedent …
From a historical point of view, investors react to periods of high uncertainty (like the current one) by reducing their exposure or fleeing the stock market altogether and investing in government debt (the so-called “flight to quality“ or “flight to safety“).
This means that stock market liquidity will soon dry up and company investments will freeze. If the stock market turbulence continues throughout this week, the Fed, Bank of England and ECB might be forced to act together by cutting interest rates before the Easter break.
If this was what Trump wanted, then he will get the message that he can always get his way towards dictating interest rates through, for instance, tariff threats…
For the third day running, financial markets are a hefty sea of red across the globe.
In London, the FTSE 100 is falling deeper into the red as investors watch stocks open sharply lower in New York.
Professor of Financial Accounting, Dan Segal from Warwick Business School, says:
“Stock markets are in freefall with no clear bottom in sight as President Trump escalates his global trade war. Just last week, sweeping new tariffs were announced, affecting trade with the majority of U.S. partners. Most notably, starting April 5, 2025, a 10% blanket tariff was imposed on all imports from the UK. This comes on top of the existing 25% tariffs on steel, aluminum, automobiles, and auto parts.
With imports accounting for around 14% of the U.S. GDP, economists warn that the country may be headed straight into stagflation—a rare and damaging combination of rising prices and shrinking economic output. As firms grapple with higher input costs, many will be forced to pass those costs on to consumers. Worse yet, even products not directly targeted by the tariffs may see price hikes as domestic producers raise prices in line with more expensive imports.
This domino effect—higher prices, weakened demand, reduced production, and potential job cuts—has sent a shockwave through global markets. The uncertainty surrounding the scope and duration of the tariffs, combined with elevated equity valuations after two years of double-digit returns, has fueled a wave of panic selling.
Tesla leads the S&P 500 fallers
Elon Musk’s Tesla is having another tough day on the stock market.
Shares in Tesla are down 8.5% in early trading, making it the worst-performing stock on the S&P 500 index.
Other big fallers include chipmaker AMD (-7.5%), and data analytics firm Palantir (7.1%).
Wall Street slides, putting S&P 500 into ‘bear market’ territory
Ding Ding! The opening bell of the New York stock exchange is ringing out, and stocks are sliding again.
The S&P 500 shares index, the broad measure of US shares, is down 3.4% at the start of trading – which takes it into ‘bear market territory’ (more than 20% below its record high).
The Dow Jones industrial average shed 1,191 points at the open, a fall of 3.1%, to 37,123 points.
And the tech-focused Nasdaq index is down 3.9%.
Traders will be reacting to the warnings from the likes of Goldman Sachs that the trade war increases the risks of a US recession, with Donald Trump not showing any signs of backing down.
Bloomberg points out that Wall Street has lost around 13% of its value since Thursday, which is the third-worst three-day run ever, after the early days of Covid-19 in March 2020, and during the 2008 financial crisis.
Trump: talks to begin with Japan on trade
Donald Trump has confirmed that he spoke with Japanese prime minister Shigeru Ishiba about tariffs.
Posting on Truth Social, Trump says:
Countries from all over the World are talking to us. Tough but fair parameters are being set. Spoke to the Japanese Prime Minister this morning. He is sending a top team to negotiate!
They have treated the U.S. very poorly on Trade. They don’t take our cars, but we take MILLIONS of theirs. Likewise Agriculture, and many other “things.” It all has to change, but especially with CHINA!!!
Japanese prime minister Shigeru Ishiba has said he told US president Donald Trump in a telephone call that his tariff policies are extremely disappointing and urged him to rethink.
Ishiba told reporters in Tokyo:
“I’ve told the President that Japan has been the biggest investor in the United States for five straight years and the tariff policies could hurt our Japanese companies’ investment capabilities.”
Ishiba also said he agreed with Trump to continue constructive dialogue on the issue.
Video: Chinese foreign ministry calls US tariffs ‘economic bullying’
Here’s a video of today’s press briefing at the Chinese foreign ministry:
US central bank policymakers will get a chance to discuss the market mayhem later today, when they meet.
The Federal Reserve is holding a “Closed Board Meeting” later today, in Washington, DC, for Fed board governors.
There’s only one item listed under ‘matters to be considered’:
1) Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.
The meeting has caused a little stir online and in social media, with claims that this is an emergency meeting to address the market meltdown.
However, the details of the meeting are dated 3 April, which is last Thursday, indicating it is not an emergency reaction to the slump on Friday and today.
Donald Trump’s economic adviser, Kevin Hassett, has pushed back against criticism of the president’s trade policies.
Speaking on Fox News, Hassett says that more than 50 countries are in negotiations with the president, pointing out that Taiwan ‘reached out’ overnight, and that the prime minister of Israel is visiting the White House today.
Hassett also argues that critics such as investor Bill Ackman should ‘ease off the rhetoric’.
He says that the new 10% baseline tariff only applies to 14% of US GDP, while the remaining 86% will benefit from “deregulation and tax cuts”.
Asked about Ackman’s warning overnight that the US risks a ‘self-induced, economic nuclear winter unless there is a time-out on tariffs, Hassett insists:
The idea that it’s going to be a nuclear winter, or something like that, is completely irresponsible rhetoric.
With oil at four-year low, petrol should be cheaper….
The oil price is wallowing around its lowest level in four years.
Brent crude is down 2.5% today at below $64 per barrel, a level last seen in April 2021.
Motoring bodies are pushing retailers to cut petrol and diesel prices in response.
RAC head of policy Simon Williams says:
“With oil tumbling to its lowest price for four years, drivers ought to see cuts of up to 6p a litre at the pumps ahead of the notoriously busy Easter weekend on the roads.
“As long as the barrel carries on trading around or below the $65 mark, retailers will be obliged to pass on the savings they’re benefitting from to their customers on the forecourt. The RAC believes they should be motivated to do so as they continue to be scrutinised by the Competition and Markets Authority, which only a week ago reported that it’s still concerned about a lack of competition in fuel retailing.
“Petrol should drop from its current UK average of 136p to 130p a litre and diesel from 143p to 137p. If unleaded were to fall to that level, it would be the cheapest since summer 2021. Diesel hasn’t been that low since September that year.”
The pound has slipped to a five-week low against the US dollar today, as investors continues to shun riskier assets.
Sterling is down three quarters of a cent against the dollar today, at $1.281, its weakest point since 5 March.
Traders have been piling into traditional safe-haven currencies such as the yen and the Swiss franc.
