The sell-off continues after China's swift response to tariffs announced on Wednesday 📌
Wall Street sentiment remains extremely negative after China announced a 34% tariff on all goods imported from the United States. CFDs on US indices are already seeing a several percent sell-off, with the US500 down 2.80%, the US100 down 3.10% and the US2000 a record 4.30%. Oil is falling even more on fears of a global slowdown in trade.
China's swift retaliatory response has heightened fears of a US recession and a global trade war. On Wednesday, Trump announced a wide range of tariffs for all trading partners, raising the average level of US tariffs to over 20% - the highest level in over 100 years. During the president's speech, the main argument was the introduction of retaliatory tariffs, which would restore the balance in trade. However, the level of the rates and the way they were determined were highly questioned in later comments by experts. Today's reaction from China, which came just two days later, however, eliminates the chance of no further escalation and rightly raises investors' concerns about the escalation of the conflict. It is possible that other US partners may follow China's example. For example, the European Union is already planning retaliatory tariffs if bilateral talks do not go as expected.
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Currently, the market is pricing in a 50% chance of the first interest rate cut in May and almost 5 full cuts in the whole of 2025. Source: Bloomberg Finance L.P.
The declines are not bypassing European markets either. Currently, contracts based on the German DAX and the Polish WIG20 are losing almost 4.5%. Source: xStaiion
OIL
WTI and BRENT oil prices are seeing monstrous declines due to China's decision to impose retaliatory tariffs of 34% on the US.
WTI oil prices are dropping to their lowest levels since August 2021. Source: xStation
As such, today's price reductions for the raw material are reaching their largest magnitude since 2022. Source: XTB
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