Global Markets Plunge as US-China Trade Rift Widens; Gold Hits Record High
Global stock markets experienced a sharp downturn on Wednesday as intensifying trade tensions between the United States and China drove investors toward safer assets, pushing gold prices to unprecedented levels.
The latest blow to market confidence came from new U.S. licensing rules restricting Nvidia and AMD from selling AI chips to China. Nvidia, anticipating a revenue hit of $5.5 billion due to the restrictions, saw its stock sink nearly 7%.
The MSCI World Index dropped 1.5%, reflecting the global unease. U.S. benchmarks followed suit: the Dow Jones fell 1.7%, the S&P 500 lost 2.2%, and the tech-heavy Nasdaq plunged 3.1%.
“Markets are stuck between conflicting signals—new tariffs on one hand, and talks of easing them on the other,” noted Paul Christopher from Wells Fargo.
Meanwhile, Federal Reserve Chair Jerome Powell indicated no immediate changes to interest rates, attributing market instability largely to the unpredictability of the Trump administration’s trade tactics. “Like many of us, Powell is in a holding pattern, watching and waiting,” said Jamie Cox of Harris Financial Group.
March retail data revealed strong auto sales ahead of expected tariffs, though consumer spending overall appeared to cool. President Trump also launched a fresh investigation into potential tariffs on critical mineral imports, adding to ongoing reviews concerning semiconductors and pharmaceuticals. In retaliation, China reportedly advised its airlines to suspend new Boeing aircraft deliveries.
In Europe, the STOXX 600 Index declined 0.2%, weighed down by technology stocks. Asian markets showed mixed results—Chinese blue-chip stocks edged up 0.3% following favorable GDP data, while Hong Kong’s Hang Seng Index slipped 1.9%.
Gold soared 3.5% to an all-time high of $3,339 per ounce as market uncertainty deepened. ANZ upgraded its year-end forecast for gold to $3,600. U.S. Treasury yields also retreated, with the 10-year note falling to 4.283% on expectations of possible rate cuts by mid-year.
The U.S. dollar weakened, sliding 0.7% to its lowest level since April 2022. The Japanese yen and Swiss franc saw gains of 0.8% and 1.2%, respectively. Bank of Japan Governor Kazuo Ueda suggested rate hikes may pause if trade frictions hurt Japan’s economy.
Oil prices climbed to a two-week high following new U.S. sanctions on Chinese importers of Iranian crude. Meanwhile, Bitcoin ticked up 0.5% to $84,389, though it remains down nearly 10% since the start of the year.
