European stocks opened lower on Friday, extending Thursday’s deep sell-off. Asian markets also fell, with the US set to extend declines as investors moved into government bonds as a refuge from Donald Trump’s tariff blitz.
The Stoxx Europe 600 index fell 1 per cent in early trading after a 2.6 per cent drop on Thursday. Germany’s Dax fell 0.7 per cent.
Japan’s Topix was down 4.5 per cent and Australia’s S&P/ASX 200 index retreated 2.2 per cent, while South Korea’s Kospi dropped 1.7 per cent.
Oil prices continued to fall, with Brent crude down 1.8 per cent at $68.86 a barrel.
Trevor Greetham of Royal London Asset Management said investors had been unnerved by the tariffs assault, creating a “loss of confidence” in US policymaking. “If they are willing to set tariffs on what seems a really arbitrary and spurious calculation basis, what else are they willing to do?”
Government bond yields dropped as investors sought out haven assets, with the US 10-year Treasury falling below 4 per cent. Yields on 10-year Japanese government bonds dropped 0.16 percentage points to 1.2 per cent.
Futures markets are also pointing to fresh drops on Wall Street today, but smaller declines compared with Thursday’s worst drop since 2020.
The blue-chip S&P 500 index is set to open 0.5 per cent lower, and the tech-heavy Nasdaq 100 index 0.3 per cent, according to current levels. Investors will be watching the US non-farm payrolls release, which economists surveyed by Reuters estimate at 135,000 jobs added.
Federal Reserve chair Jay Powell will deliver a speech in the late US morning.
Traders in swap markets are now fully pricing in four quarter-point interest rate cuts by the end of this year from the Fed, according to levels implied by swaps market, from the three that were expected before the tariffs announcement.
The dollar weakened 0.4 per cent while the yen strengthened 0.3 per cent to ¥145.7, its highest level since October.
