The stock market had a rough week. Major indexes like the S&P 500 and Dow fell for the fourth day in a row. Traders are bracing for Donald Trump’s “Liberation Day” tariffs, which could shake global trade even more. Trump already hit foreign cars with a 25% tariff and plans more on April 2.
The uncertainty is making investors nervous. From Asia to Wall Street, traders are selling stocks and running to safer bets like bonds and gold. US Treasury yields dropped as investors piled into debt. The fear? A possible hit to global growth and a spike in inflation if tariffs go too far.
China’s Stock Market Soars on AI, But Risks Remain
While the global stock market stumbled, Chinese stocks did the opposite. Mainland equities jumped nearly 30% in the past six months, driven by AI hype, not economic recovery. The rally started after DeepSeek, a Chinese firm, launched a powerful new AI model in January. That kicked off a tech buying frenzy.
But this rise hasn’t lifted other emerging markets. In fact, EM stocks (excluding China) are down 7% over the same period. Analysts say this isn’t the usual Chinese boom that helps everyone else. It’s tech-driven, not trade-driven. And there’s a big shadow hanging over the rally: Trump’s tariffs. If the US targets China directly again, the rally could fade fast.
Nikkei Tanks as Japan Feels Tariff Heat
Japan’s Nikkei 225 plunged into correction territory. Exporters and chipmakers led the drop, with some stocks falling over 8%. The Nikkei fell more than 4% in a single day and is now down 12% from its December peak. A rising yen only made things worse, hurting exporters even more.
Why the panic? All signs point to Trump. His planned tariffs are putting global supply chains at risk, and Japan, a major US trade partner, is in the crosshairs. With US economic data softening, investors fear a global slowdown that could slash demand for Japanese goods. The sell-off is part of a bigger, risk-off move across Asia.
Bond Rally and Gold Surge as Safe Havens Shine
As stocks sank, investors rushed to safety. Bonds rallied around the world. US Treasury yields hit new lows. The reason? Fear of economic damage from tariffs, along with rising talk of recession. Goldman Sachs now expects the Fed and ECB to cut interest rates three times this year.
Meanwhile, gold surged to a fresh record above $3,100 an ounce. Analysts think it could hit $3,300 by year-end. A softer US dollar is adding fuel to the rally. “As the Trump administration seems to be painting a grim picture of the US economy, we’re looking at a weakening US dollar, not just a plummeting stock market. Over the past month, the US dollar index lost more than 3%. As a result, safe-haven gold and silver are back on investors’ radar. What the future holds remains anyone’s guess,” Maria Patti, Financial Markets Strategist at Exness, explains.
This flight to safety signals deep concern about the future of the global economy. With tariffs, currency volatility, and weak demand clouding the outlook, investors are hedging their bets.
Jobs Report Ahead: A Test for Stock Market Mood
All eyes now turn to the upcoming jobs report. The US labor market is still growing, but more slowly. Economists expect 135,000 new jobs in March — down from February’s 151,000. The unemployment rate is expected to stay at 4.1%.
If job growth disappoints, fears of stagflation — slow growth plus sticky inflation — could hit stocks even harder. Already, consumer sentiment is weakening, and companies are slashing earnings forecasts. Over 60% of S&P 500 firms giving guidance this quarter have issued negative updates. With both tariffs and weak data looming, the stock market may face more rough weeks ahead.
Final Thoughts
The stock market is being squeezed from all sides — Trump’s tariffs, weak economic signals, AI-driven divergence in China, and a nervous bond market. Unless the jobs report brings a surprise boost, the pressure is likely to keep building.