London’s blue-chip stock index experienced a sharp decline following significant losses in Asian markets after U.S. President Donald Trump confirmed sweeping import tariffs on the UK and other nations.
At the opening bell, the FTSE 100 Index plunged by 122.4 points, or 1.4%, within the first few minutes of trading. European markets saw even steeper declines, with Germany’s Dax and France’s Cac 40 both falling by more than 2%, as Trump’s so-called “Liberation Day” led to hefty new tariffs on imports into the U.S., including a 10% levy on UK goods.
Asian markets also suffered heavy losses overnight, with Japan’s Nikkei dropping nearly 3% and China’s Hang Seng declining by 1.5%.
While U.S. stock markets closed higher the previous night, pre-market futures trading indicated a significant downturn for the S&P 500, Nasdaq, and Dow Jones, weighed down by losses in retail and major technology stocks.
Gold surged to another record high as investors sought safe-haven assets, while the pound edged up 0.01% against a weakening U.S. dollar to $1.292 and remained steady at €1.197.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, commented: “Trump’s aggressive move to reshape global trade has sent shockwaves through financial markets worldwide.
“The aftermath of ‘Liberation Day’ is being felt across all regions, with Asian stocks plunging overnight, European equities under pressure in early trading, and U.S. futures pointing toward a sharp drop.
“With tariffs at their highest levels in over a century, the U.S. could generate an additional $600 billion in revenue—though in reality, this translates to an extra $600 billion in costs for businesses and consumers.”
The U.S. dollar weakened significantly against major currencies as traders reacted to the uncertainty surrounding the global trade landscape and potential retaliatory measures from affected nations.
Chris Beauchamp, chief market analyst at IG, noted: “Businesses and investors are waking up to a new reality following Trump’s tariff announcement.
“Markets have responded with a renewed sell-off in U.S. stocks, despite the small rebound seen overnight.”
He further cautioned: “If key trade partners such as the EU impose retaliatory tariffs, the U.S. will likely escalate its own measures in response. Markets now face a trade war on a scale unseen in decades.”
Gold hit another all-time high as investors fled to safe-haven assets in reaction to the tariff news, particularly as bullion remains one of the few commodities exempt from the tariffs. The price of gold soared above $3,167.84 per ounce at one point before retreating slightly on Thursday morning.
Linh Tran, a market analyst at XS.com, remarked: “Unlike past trade disputes that primarily involved U.S.–China tensions, this round of tariffs covers a broader range of industries, including electric vehicles, semiconductors, steel, and renewable energy.
“This has heightened fears not only of retaliatory actions by affected countries but also of a deeper fragmentation in global supply chains over the coming years.
“In response, the market has shifted decisively into a defensive stance, with investors pulling capital from equities and risk assets and pouring into gold, the traditional safe-haven asset.”
Meanwhile, oil prices slumped as the tariffs raised concerns about slower global economic growth and weaker demand for crude. Brent crude dropped more than 3%, falling to $72.4 per barrel.
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