The S&P/ASX 200 experienced a significant downturn, falling 1.8% to 7,375 points, mirroring Wall Street’s late-session dip amidst fluctuating trade agreement news. Initial optimism regarding a potential US trade agreement was quickly overshadowed by renewed US-China trade tensions. President Trump’s threat of an additional 50% tariff on Chinese goods, potentially raising the total tariff rate to 104%, triggered market unease.
All sectors on the ASX started negatively, with energy leading the decline at 4.03%. Mining companies like Mineral Resources, Nickel Industries, and Pilbara Minerals experienced substantial losses. According to Saxo’s Jacob Falkencrone, these tariffs create economic uncertainty, leading businesses to hesitate on investments and consumers to become cautious, potentially slowing the economy. Analysis suggests Trump’s tariffs could cost American households an extra US$1,350 annually, slowing investment and job creation. Despite market downturns, gold saw renewed demand, briefly pushing above US$3,000 an ounce, while China increased copper purchases, stabilizing its price amid tariff-induced drops. This buying activity aims to replenish low global inventories and prepare for anticipated support from Beijing to stimulate domestic demand.
