By WSJ Staff
Global markets convulsed as sweeping new U.S. tariffs went into effect and China retaliated, setting up Wall Street for another tense session.
Taking center stage was the selloff in U.S. Treasurys. The yield on the 10-year note, the reference point for trillions of dollars in loans and securities, rose as high as 4.47% Wednesday before retreating to a recent 4.39%. It marked the largest rise over a four-day period since the height of the 2008 financial crisis.
Investors say there is broad nervousness about holding longer-term Treasurys ahead of government auctions Wednesday and Thursday. That anxiety contributed to a global stock selloff, with stock futures down 2% or more, Japanese equities falling 3.9% and Europe's main benchmark dropping 4%.
U.S. stocks opened mixed Wednesday, with the Dow industrials down almost 1% and the other two major indexes mixed.
Trump's reciprocal tariffs on nearly 100 nations took effect overnight, including a 104% tariff on Chinese imports. On Wednesday, Beijing said it would raise levies on U.S. imports to 84%, from 34%.
JPMorgan's chief executive, Jamie Dimon, said he thought a recession was a likely outcome of the tariffs. But Treasury Secretary Scott Bessent said at a banking convention in Washington, D.C., that "there is a little uncertainty," but most corporate executives "tell me the economy is very solid."
"We are in pretty good shape," Bessent said.
"BE COOL!" Trump said in a social media post. "Everything is going to work out well. The USA will be bigger and better than ever before!"
Trump said Tuesday that levies on pharmaceutical imports will be announced "very shortly." Pharma stocks such as Merck and Pfizer were down 3% early Wednesday.
In latest moves:
U.S. stocks were mixed, with the Nasdaq up modestly and the other two major indexes down.
The WSJ Dollar Index weakened, extending declines from its January high. Deutsche Bank said the past week's trading represents a "collapse in the price of all U.S. assets." The Bank of England said the risk of more sharp corrections remains high.
Brent crude futures, the benchmark for international oil prices, fell to a roughly four-year low, a sign of intense stress in markets and fear that the economic outlook is dimming.
Vanguard cut its forecast for 2025 U.S. GDP growth to less than 1%, roughly a percentage point below its previous estimate. The new forecast assumes Trump will walk back some of his tariffs.
Japan's top currency diplomat pledged to ensure stability in the global financial system, saying Tokyo will coordinate with other nations on how to handle U.S. tariffs.
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(END) Dow Jones Newswires
April 09, 2025 09:43 ET (13:43 GMT)
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