Stocks and Dollar Tumble While Gold Soars to Record High Amid Renewed Trump Tariff Fears

Suvradas

Apr 11, 2025 - 12:05

Markets were rattled again on Friday as stocks and the dollar plunged while gold soared to a new all-time high, driven by renewed concerns over Donald Trump's aggressive global tariff strategy. The volatility returned after the former U.S. president admitted there would be “transition costs” associated with his tariff campaign.

Although Trump’s move to delay sweeping tariffs for 90 days initially sparked a surge in battered equities, optimism quickly faded. Investors realized that the pause offered no real resolution, especially as Trump doubled down on trade tensions with China. This reversal triggered another wave of selling.

Following Thursday’s rally fueled by the temporary tariff reprieve, Asian markets closed the week sharply lower. Tokyo dropped over 4% after surging more than 9% the day before, while Sydney, Seoul, Singapore, Taipei, Wellington, Jakarta, and Manila also ended in the red.

Vietnam’s Ho Chi Minh City bucked the trend after officials announced plans to hold talks with Trump, while Shanghai wavered amid hopes of new Chinese stimulus measures despite looming tariffs as high as 145%. Beijing later pledged a "moderately loose" monetary policy to calm investor nerves.

Losses echoed across Wall Street where the S&P 500 fell 3.5%, the Dow dropped 2.5%, and the Nasdaq tumbled 4.3%, eroding much of Thursday’s massive gains.

The sell-off extended beyond equities. The dollar weakened sharply against the yen, euro, pound, and Swiss franc, as investors shed U.S. assets, including Treasuries — typically considered safe havens — and flocked to gold, which surged above $3,200.

Oil prices also took a hit, sliding further on fears of a global recession.

"Ground Zero"
Chris Weston of Pepperstone Group said the market was experiencing a strong “sell U.S.” sentiment, with capital flowing into traditional safe havens. He noted that the tariff pause may have only underscored systemic risk, sparking repatriation of funds away from what he described as "Ground Zero."

The sell-off in U.S. Treasuries pushed yields higher, raising concerns about rising borrowing costs and potential deeper financial fallout.

Michael Krautzberger of Allianz Global Investors warned that the falling dollar may indicate investors are questioning its role as the world’s reserve currency. He said recent U.S. tariff threats could provoke retaliation from foreign holders of U.S. debt, particularly in China, escalating the trade war into a full-blown capital war.

Trump, for his part, maintains that tariffs will ultimately reshape global trade in America’s favor, encouraging domestic manufacturing and reducing trade barriers. While acknowledging short-term disruption, he insisted, “In the end, it’s going to be a beautiful thing.”

Commerce Secretary Howard Lutnick echoed the sentiment, posting online that “the Golden Age is coming,” promising bold negotiations and economic expansion.

Trump also warned that if no agreements are reached during the 90-day grace period, the delayed tariffs will be reinstated: “If we can't make the deal we want… then we’d go back to where we were.”

Market Snapshot as of 02:30 GMT