(April 7): US equity futures slumped and the yen surged early Monday in a sign of deepening turmoil across financial markets as investors began to price in the fallout from Donald Trump’s reciprocal tariffs.

S&P 500 contracts fell 4% after the benchmark suffered its worst two-day plunge since March 2020 on Friday, slashing over US$5 trillion (RM22.32 trillion) in value. Equity futures for Japan and Australia are down more than 4%. China stocks are expected to fall sharply when trading resumes after an extended weekend, during which Beijing announced 34% tariffs on all imports from the US. A gauge of US-listed Chinese shares fell 8.9% on Friday.

The Japanese yen and Swiss franc strengthened as traders sought havens, while the Australian and New Zealand dollars tumbled. Oil fell more than 3%. Copper futures sank by more than 8% in early trading. The metal, which has a high historical correlation to global growth, fell more than 10% last week. 

“We expect the market fallout from the tariffs to continue this week,” said Win Thin of Brown Brothers Harriman. Trump administration officials have signaled that no policy changes are planned to address the market selloff, he said. “Given this message, equity markets are likely to continue selling off and Treasuries are likely to continue rallying.”

A rally in US government debt sent the US two-year yield to touch the lowest since 2022 last week. Those gains could accelerate as traders price in a greater chance the Federal Reserve moves most aggressively to cut interest rates to keep the economy from stalling. 

Trump’s tariffs, which come into effect April 9, have led to retaliatory moves from US trading partners and have already impacted the operations of global businesses.

In addition to imposing new tariffs in response to Trump’s latest levies, China over the weekend pledged decisive action to defend its economy. These include “resolute measures” to safeguard its sovereignty, security and other interests, the state-owned Xinhua News Agency reported on Saturday.

Malaysia will lead efforts to coordinate a regional response in Southeast Asia toward US tariffs, the country’s Datuk Seri Prime Minister Anwar Ibrahim said. 

In the UK, automaker Jaguar Land Rover is pausing shipments of its cars to the US as it looks at ways to address the tariffs.

India, meanwhile, signaled it would not impose retaliatory tariffs as it seeks to engage the US in trade negotiations.

Uploaded by Isabelle Francis