Donald Trump’s trade war rhetoric has led to the worst day on Wall Street since April.
Donald Trump’s trade war rhetoric led to the worst day on Wall Street since April. Bloomberg
Still, the prospect of a trade war between the world’s two largest economies spooked US investors on Friday. The S&P 500 tumbled 2.7 per cent in its worst session in six months, while the Nasdaq 100 sank 3.5 per cent. Wall Street’s fear gauge, the VIX, topped 20 for the first time since April.
Australian shares are set to be swept up in the sell-off, with futures pointing to a 0.9 per cent decline when the S&P/ASX 200 opens on Monday. But strategists are expecting investors to swoop in, as they have become desensitised to Washington’s trade threats.
“Trump’s bark is louder than his bite, so the temptation will always be to buy the dip, particularly when positioning is not extreme and central banks are cutting rates,” said Perpetual’s head of investment strategy Matthew Sherwood. “The market isn’t going to roll over on its own volition – it will take a macroeconomic or monetary policy shock to upset this momentum.”
Source: https://www.afr.com/markets/equity-markets/asx-to-follow-wall-street-lower-as-tariff-anxiety-returns-to-markets-20251010-p5n1oi