Global Markets Reel from Trump's Trade Tariff Shockwaves

Global stocks plunged for a second consecutive day amid fears of a recession after President Trump's extension of U.S. tariffs and China's counter-move. Investors sought government bonds and safe currencies as central banks considered steep rate cuts. The dollar fell sharply as fears hardened and oil prices dropped.

Global stock markets took a significant hit for the second day on Friday as U.S. President Donald Trump's comprehensive tariff strategy sparked fears of a looming global recession. China's announcement to counter with additional tariffs stirred anxieties, deepening the sell-off. Investors sought refuge in government bonds and the Japanese yen as speculation rose around potential steep rate cuts by the Federal Reserve and other major central banks.

In a historic move, Trump imposed a 10% tariff on most U.S. imports while significantly increasing levies on numerous countries, marking the most severe trade barriers in over a century. Investors' concerns about a full-blown global trade war seemed validated by China's retaliation. According to George Saravelos, global head of FX research at Deutsche Bank, markets are now bracing for a global recession.

Despite data indicating unexpected job growth in the U.S., the mood remained grim. Major indices like Europe's STOXX 600 and Japan's Nikkei 225 saw substantial declines, similar to Wall Street's S&P 500 and Nasdaq. The investors' shift towards safer assets was evident as the yield on 10-year U.S. Treasury bonds fell and safe-haven currencies like the yen and Swiss franc gained value.

(With inputs from agencies.)