Stocks, dollar sink, bonds pummelled again as trade war roils markets

Global stocks slumped and the dollar sank further on Friday, while a manic bond selloff took hold in a brutal end to the week of tit-for-tat worldwide tariffs that have fed fears of a deep recession and shaken investor confidence in U.S. assets.

The anxiety has sparked a rush into safe havens, sending the Swiss franc soaring to a decade high against the dollar, and gold to a new peak after a brief but massive relief rally following U.S. President Donald Trump's move to temporarily lower tariffs on many countries.

The selloff in U.S. Treasuries picked up pace during Asian hours, with the 10-year note yield rising to 4.475%, gaining over 40 basis points in the week, the biggest increase since 2001, LSEG data showed.

Analysts and investors across the globe have pointed to this week's sharp sell-off in Treasuries and weakness in the dollar as evidence that confidence in the world's biggest economy has been shaken.

"There's clearly an exodus from U.S. assets. A falling currency and bond market is never a good sign," said Kyle Rodda, senior financial markets analyst at Capital.com. "This goes beyond pricing in a growth slowdown and trade uncertainty."

In Asia, Japan's Nikkei (.N225) tumbled 4.5% on the day, while stocks in South Korea (.KS11) fell 1.7%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 0.5% lower.

U.S. futures for S&P 500 and Nasdaq fell about 1% each after a sharp drop overnight.

"The short-term outlook for global risk assets remains uncertain given growth and inflation concerns, fluid sentiments and fast-changing developments on the trade and tariff fronts," said Vasu Menon, managing director of investment strategy at OCBC Bank in Singapore.

Investors are grappling with worries over the escalating Sino-U.S. trade war after Trump ratcheted up tariffs on Chinese imports, raising them effectively to 145%.

China has hit back, hiking its tariffs on the U.S. with each Trump increase, raising fears that Beijing may jack up duties above the current 84%.

Wall Street volatility continued on Thursday with the Dow dropping 2.5%, the S&P 500 shedding nearly 3.5% and the Nasdaq losing 4.3%.

Chinese stocks made a subdued start on Friday. The blue-chip CSI300 Index (.CSI300), opens new tab was off 0.5% while Hong Kong's benchmark Hang Seng (.HSI), opens new tab was down 0.38%.

James Athey, fixed income manager at Marlborough, said the outlook remains darker and more clouded in uncertainty than it did a month ago. "There are still so many unanswered and unanswerable questions."

DOLLAR LOSES ITS CROWN

The U.S. dollar has faced relentless selling in the past few weeks, with traders seeking shelter in the Japanese yen , the Swiss franc as well as the euro .

On Friday, the dollar sank to its lowest in 10 years against the Swiss franc and a six-month low against the yen. The euro surged 1.7% to $1.13855, a level last seen in February 2022.

The dollar index , which measures the greenback against six other units, fell below 100 for the first time since July 2023. The dollar's slide provided relief to some of the currencies in emerging markets, including the ringgit .