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Market Mayhem: Global Stocks Slide, Dollar Sinks, and Gold Soars Amid Trump Tariff Jitters

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Global financial markets were thrown into disarray on Friday, as stocks plunged, the US dollar weakened, and gold surged to a record high — all triggered by renewed fears over Donald Trump’s tariff-driven economic strategy. Investors reacted sharply after the former US president admitted that his aggressive global tariff plans would involve “transition costs”, fueling panic among traders.

Trump’s earlier decision to delay implementing major tariffs by 90 days had briefly lifted market sentiment, prompting a temporary rally across equities. However, as the reality set in that little had actually been resolved and that Trump was intensifying his trade confrontation with China, confidence quickly evaporated. Markets, which had bounced on Thursday, tumbled again by Friday.

In Asia, Tokyo’s Nikkei 225 led the decline, dropping over 4% after a stunning 9% gain the previous day. Other key indices in Sydney, Seoul, Singapore, Taipei, Jakarta, Wellington, and Manila also ended in the red. Hong Kong followed suit with a 1.1% loss, while Shanghai saw limited movement as investors placed hopes on possible stimulus from Beijing rather than dwelling on the newly threatened 145% tariffs.

Vietnam’s Ho Chi Minh City bucked the trend slightly following news that it would enter trade talks with the US. Meanwhile, Beijing tried to calm nerves, stating it would adopt a “moderately loose” monetary policy to support the economy and markets.

In the US, the sell-off on Wall Street was dramatic. The S&P 500 slid 3.5%, the Dow Jones Industrial Average fell 2.5%, and the tech-heavy Nasdaq plummeted 4.3%. Those drops reversed much of Thursday’s sharp gains of 9.5%, 7.9%, and 12.2% respectively.

Currency markets also witnessed turbulence. The US dollar lost ground against major currencies including the yen, euro, pound, and Swiss franc — a surprising twist given its usual safe-haven appeal. Analysts say investors were fleeing not just equities, but also traditional US assets such as Treasury bonds, amid growing concerns about systemic risk.

As a result, gold surged to a new record high, climbing above $3,200 per ounce as investors rushed into safe-haven assets. Meanwhile, crude oil prices slumped further on growing recession fears. West Texas Intermediate and Brent crude both dropped by 0.7%, trading at $59.63 and $62.92 per barrel respectively.

“There’s been a clear ‘sell US’ mood in the markets,” said Chris Weston of the Pepperstone Group. “This looks like capital flight from perceived Ground Zero — a reaction to Trump’s tariff hesitation being seen not as strength, but as a warning signal of deeper trouble.”

Weston suggested the sell-off might include repatriation by foreign entities wary of rising geopolitical and economic instability. The selling pressure on US Treasuries, which sent yields higher, has stoked fears that foreign holders of US debt — especially in tariff-affected nations — may begin offloading their holdings as part of a broader retaliatory strategy.

Michael Krautzberger of Allianz Global Investors warned that the dollar’s decline could signal doubts about its role as the world’s reserve currency. “The danger is that this escalates from a trade war to a capital war, especially if major foreign holders of US Treasuries begin dumping assets in response to tariffs,” he noted.

Trump, meanwhile, remained defiant. While acknowledging on Thursday that there would be “transition costs and problems”, he dismissed the market turmoil and insisted his tariff policy would ultimately reshape the global economy in favor of the United States. “In the end, it’s going to be a beautiful thing,” he claimed.

US Commerce Secretary Howard Lutnick echoed Trump’s optimism, posting on social media that “the Golden Age is coming,” and that the administration was committed to protecting American interests while pursuing global negotiations.

However, Trump also warned that the delayed tariffs could return if deals with other countries were not reached within the 90-day window. “If we can’t get the deal we want… we’ll go back to where we were,” he stated.

The week closed with investors facing heightened uncertainty and increased volatility, a stark reminder of how geopolitical moves can send shockwaves through global markets.

Key Market Figures (as of 0230 GMT):