Oil prices hit the biggest single-day drop in two years, Trump tariffs triggered a sharp drop in the market, gold prices fell by more than 2% from historical highs

Basic news

On Friday (April 4, Beijing time), spot gold trading was around 3116.24, gold prices narrowed their decline on Thursday after falling more than 2% from a historical high. The market decline caused by US President Trump's import tariffs also affected gold traders; US crude oil trading was around US$66.61 per barrel, and oil prices fell sharply on Thursday, setting the largest single-day drop since 2022. On the second day after US President Trump announced the full imposition of new import tariffs, OPEC+ unexpectedly agreed to increase production.

The S&P 500 closed down 4.84% on Thursday to 5396.52 points; the Nasdaq fell 5.97% to 16550.61 points. The Dow Jones Industrial Average fell 3.98% to 40,545.93 points.

Stock Market

U.S. stock indexes plummeted Thursday, hitting the biggest one-day percentage drop in years as U.S. President Trump's xmaccount.comprehensive tariff policy sparked concerns about a full-scale trade war and a global recession.

The total share capital of the S&P 500 stocks evaporated by $2.4 trillion, the index hit its largest single-day percentage drop since June 2020.

The Dow Jones Industrial Average also hit its largest single-day decline since June 2020, while the Nasdaq Index hit its largest single-day decline since the COVID-19 pandemic caused global markets to fall into a downturn in March 2020.

The fuse is that Trump imposes 10% tariffs on most U.S. imports and higher tariffs on dozens of other countries, which has the potential to trigger global economic turmoil.

Investors sell positions to reflect new economic reality while worrying about how other countries will respond to Trump's statement at the White House.

The EU has expressed retaliation, which will face a 20% tariff. South Korea, Mexico, India and several other trading partners said they would stay on hold for the time being because they would seek relief before the tariffs take effect on April 9.

It is expected to fluctuate violently in the xmaccount.coming days, and the CBOE volatility index, known as the Wall Street Fear Index, closed above 30 points for the first time since August. "There are still much more questions now than the answers," said Steven DeSanctis, a small and medium-cap stock strategist at Furui. "The tariffs have caused blood in U.S. stocks, in stark contrast to Trump's initial optimism since his November campaign victory, when a xmaccount.commitment to business-friendly policies pushed U.S. stocks to record highs. High-growth technology stocks that have helped drive stock indexes to hit new highs in recent years suffered a heavy blow on Thursday.

Apple fell 9.2%, its worst single-day performance in five years, with Nvidia falling 7.8% and Amazon falling 9%. Traders' expectations for the Fed's rate cut are heating up.

George Bory, chief investment strategist at the fixed income team of Allspring Global Investments, said: "The Fed does have considerable firepower to help the market. The market is currently expected to have more rate cuts and may be carried out in advance," he added that the rate cut in June now seems to be a foregone conclusion and a possibility in May is also possible.

Friday’s employment data and Fed Chairman Powell’s speech are of great significance and may provide vital revelation for the health of the U.S. economy and future interest rate trends.

Retailers were hit hard by a series of new tariffs on major production centers such as Vietnam and Indonesia, with Nike and Raf Lauren plummeting 14.4% and 16.3% respectively. Large bank stocks, which are sensitive to economic risks, also plummeted. Citigroup, Bank of America and JPMorgan Chase all fell between 7% and 12.1%.

The U.S. small-cap Russell 2000 index plummeted 6.6%, the worst single-day decline since the outbreak, highlighting concerns about the health of the domestic economy.

The energy index fell 7.5%, the largest drop among the S&P 11 sectors, as crude oil prices fell 6.8% due to tariffs and OPEC+ acceleration of production growth.

The only sector that did not fall was the consumer staples sector, which rose 0.7%. This sector has historically been considered a defensive sector.

Gold market

Gold prices narrowed their decline on Thursday after falling more than 2% from their all-time highs, the United StatesThe sharp market drop caused by Trump's imposition of import tariffs has also affected gold traders. Spot gold fell 0.85% to $3,106.99, and climbed to an all-time high of $3,167.57 earlier in the session.

U.S. gold futures closed down 1.4% to $3,121.70. Traders believe the decline in gold is due to some profit-taking and margin-added situations in other asset classes, which may prompt investors to sell some of their holdings to cover losses. "As the market sells under the pressure of deleveraging, the market is looking for buying opportunities in the decline," said Peter Grant, vice president and senior metals strategist at ZanerMetals. "The market is looking for buying opportunities in the decline due to concerns that tariffs will curb economic growth, Trump's tariff policy has pushed financial markets to decline sharply. However, the overall trend of gold seems to remain unchanged, with the safe haven soaring by more than $500 so far this year.

Due to the risks brought by Trump's policy, central banks are expected to further diversify their dollar reserves by buying gold, thereby helping gold maintain its rise this year.

HSBC said in a report that while the rebound momentum of gold may drive prices up in the first half of the year, the xmaccount.combined factors in physical and financial markets may put pressure on gold by the end of 2025, which predicts the average price of gold to be $3,015.

Silver fell 5.9% to $32.01, the lowest since March 4. While silver usually follows gold, it is more susceptible to wider market volatility given its industrial use.

Platinum fell 3.2% to $951.87, while palladium fell 4.2% to $929.43. Oil market

Oil prices fell sharply on Thursday, setting the biggest single-day drop since 2022. On the second day after U.S. President Trump announced the full imposition of new import tariffs, OPEC+ unexpectedly agreed to increase production.

Brent crude oil futures closed at $70.14 per barrel, down 6.42%. U.S. crude oil futures closed at $66.95 a barrel, down 6.64%. Brent crude oil will hit its biggest drop since August 1, 2022, while U.S. crude oil will hit its biggest drop since July 11, 2022.

Eight OPEC+ countries agreed on Thursday to promote oil production increase plans, with oil production increasing by 411,000 barrels per day in May, up from the original planned 135,000 barrels per day. This unexpected decision prompted an already heavy drop in oil prices.

Angie Gildea, U.S. energy director at KPMG said, "The economy and oil demand are inseparable, and the market is still digesting tariffs, but the increase in oil production and weak global economic outlook have put downward pressure on oil prices - which may mark a new chapter in the turbulent market."

Price of oil had fallen by about 4% before the OPEC+ meetingInvestors are worried that Trump's tariffs will escalate the global trade war, curb economic growth and limit fuel demand.

Trump announced Wednesday that it would impose tariffs of at least 10% on most xmaccount.commodities imported to the world's largest oil consumer, and much higher tariffs on products from dozens of countries.

The White House said on Wednesday that imported oil, natural gas and refined oil were exempt from new tariffs. UBS analysts cut their oil price expectations for 2025-26 by $3 per barrel to $72 per barrel on Wednesday.

Foreign exchange market

The dollar fell against major currencies on Thursday, falling to six-month lows against the euro, safe-haven yen and Swiss franc, as investors weighed the impact of US President Trump's massive tariffs on global trade and economic growth.

Terrifying tariffs than expected have shocked the market, global stock markets fell, and investors turned to safe assets such as lower-risk currencies, bonds and gold as they fear the full outbreak of trade disputes could trigger a sharp global economic slowdown and exacerbate inflation.

Trump said he would impose a benchmark tariff of 10% on all goods imported into the United States and higher tariffs on some of the largest trading partners in the United States.

ForexLive chief currency analyst Adam Button said: "The message from the forex market is that U.S. economic growth will be affected and the system established by the U.S. in global trade is falling apart. At the beginning of the year, the U.S. dollar was the most crowded deal in the world. Today, the instinctive reaction to tariffs is to sell everything. Any originally crowded transaction is becoming sparse, and the U.S. dollar is no exception."

Meanwhile, the U.S. dollar responded little to weaker than expected U.S. data released by the Institute for Supply Management (ISM) on Thursday, which showed that U.S. service industry activity slowed to a nine-month low in March due to uncertainty caused by tariffs.

The previously released U.S. consumer and business survey report performed sluggishly, with consumer spending and inflation data raising concerns about stagflation.

At the same time, the number of initial unemployment claims in the United States fell last week, indicating that the labor market continued to remain stable.

As the market digests the impact of tariffs, investors are closely following the non-farm employment report released on Friday to find clues about the conditions of the labor market and the possible direction of the Federal Reserve's interest rate policy.

They are also watching Fed Chairman Powell’s speech on Friday, which would be a huge risk if his position is more hawkish than expected.

Button said they were all saying that we were less confident about a decline in inflation. Now that you take away the market's interest rate cut bet, (market conditions) will really become ugly soon.

The euro rose 1.74% against the dollar to $1.1037, hitting a six-month high intraday, marking its biggest intraday gain since November 2022. The dollar fell 1.95% against the yen to 146.445 yen and fell 2.35% against the Swiss franc to 0.8608 Swiss francs. Both safe-haven currencies hit six-month highs against the dollar. The pound rose 0.66% to $1.3093.

The Mexican peso and Canadian dollar strengthened, with the dollar falling more than 1% against the pound and Australian dollar.

Canada and Mexico are the two largest trading partners of the United States, and many of the two countries' exports have faced tariffs of 25%, but judging from the news announced on Wednesday, the two countries will not face additional tariffs.

International News

The risk of stagflation in the United States is rising. The two giants on Wall Street have huge differences on the Fed's interest rate path.

At around 2 a.m. local time in Zurich, UBS Global Wealth Management's chief investment officer Mark Haefele made his own judgment on US President Trump's new round of large-scale tariff measures. He wrote in a report to clients that the Fed will be forced to cut interest rates significantly this year, possibly as many as four times. About 12 hours later, Michael Gapen, chief U.S. economist at Morgan Stanley, came to a xmaccount.completely opposite conclusion: the Fed will not cut interest rates now. His team retracted forecasts for a possible rate cut in June and now expects the Fed to have to wait until next year to cut rates again. "The Fed will find it difficult to ignore the pressure of rising inflation in the short term and be unable to quickly relax monetary policy," Gapen and his team said in the report. This huge difference highlights the particularity and xmaccount.complexity of the US economic difficulties amid the escalating trade war.

The Republican Party considers raising the maximum tax rate for millionaires to 40%

According to people familiar with the matter, U.S. Republicans are considering setting up a new tax rating for people with incomes of $1 million or more to offset part of the cost of the tax bill, which is very different from the Republican stance against tax increases for decades. The new maximum tax rate will be between 39% and 40%, according to people familiar with the matter. Trump administration officials and Capitol Hill allies are beginning to draft tax plans, hoping to pass in the xmaccount.coming months. In addition, Republicans are considering raising the highest tax rate for incomes of more than $626,350 from the current 37% to 39.6%, which means the highest tax rate will return to the level set by former President Obama.

Trump: "Golden Card" visa will be issued in the next few weeks

On April 3 local time, US President Trump said that he expects to issue "Golden Card" visas in the next few weeks. On February 25, local time, US President Trump told the media at the White House that he plans to start selling US "gold cards" priced at $5 million each in two weeks, and the target group is wealthy immigrants. According to him, this kind of "gold card" will not directly give buyers US citizenship, so it does not need to pass the US Congress, but it will give the same rights as the "green card" and is a "powerful path to obtain US citizenship." Trump said the federal government can sell 10 million "gold cards" to reduce the deficit.

The White House emphasizes that there is no room for negotiations in tariffs

According to the Washington PostWhite House officials distributed key points of internal conversations and told agents that Trump’s new global tariff plan should not be seen as the starting point for negotiations, three people familiar with the matter said. As the world is trying to understand Trump’s huge new import tax, internal government directives say advisers should describe the tariffs as a response to a national emergency rather than the basis for potential new trade negotiations, people familiar with the matter said. In addition to the key points of the conversation, Trump himself told his advisers that tariffs were not intended to establish negotiations, two people familiar with the matter said.

Goldman Sachs: The US growth shock means the Federal Reserve will be in a "some level of interest rate cut model"

Ashish, chief investment officer of public investment at Goldman Sachs Asset Management? Shash said the "growth shock" currently facing the United States means that the Fed "will enter a certain rate cut this year, exceeding expectations six weeks ago or two months ago." "What we're seeing in the bond market is reasonable pricing that the Fed opens window, or the market says the Fed may actually have to relax policy further," Shash said. He added that recent economic data confirms that view, but "the additional tariff levels we've seen in the past 24 hours ... have further raised that expectation." Thursday's market pricing showed investors expect three to four rate cuts in 2025, up from about three the day before.

The White House considers a tariff investigation on key mineral imports

The White House is considering a possible tariff investigation on key mineral imports, which has brought further chaos to the key markets Trump has prioritized. A White House official said Wednesday that the Trump administration is considering an investigation into such imported products, similar to an investigation into copper under Section 232 of the Trade Expansion Act. The official did not provide a timeline, nor did he say whether this would be a 232 investigation. But the official said the possibility of such action was the reason the minerals were excluded from Trump's latest tariffs. A White House briefing showed that a series of tariffs this week did not apply to “certain minerals that are not available to the United States” and “all items that may be affected by the Article 232 tariffs in the future.”

European Central Bank meeting minutes: Officials believe that rate cuts or suspensions are options for April meetings

According to the minutes of the ECB's March meeting, central bank officials believe that it is possible to cut interest rates again or maintain interest rates unchanged next time the policy is formulated. "We think it is important that the revised wording should not be interpreted as sending a signal in either direction about the April meeting, and rate cuts and suspensions are considered, depending on the upcoming data." The ECB is weighing whether to reduce borrowing costs for the seventh time this month, a move that would bring deposit rates to 2.25%. However, the April 17 decision will be more difficult than the previous one, with some officials more worried about the region’s economy after U.S. President Donald Trump announced tariffs, while others feared inflation. While new tariffs would endanger economic growth, a significant increase in European military and infrastructure spending has been reported.Hope to protect the region's economy. Meanwhile, inflation is close to the 2% target, but its response to tariffs and fiscal expansion is unclear.

Domestic News

Ministry of Industry and Information Technology: From January to February, my country's Internet xmaccount.companies above a certain scale achieved a total profit of 19.34 billion yuan, a year-on-year decrease of 6.2%. Data from the Ministry of Industry and Information Technology showed that from January to February, my country's Internet and related service xmaccount.companies above a certain scale achieved Internet business revenue of 232.1 billion yuan, a year-on-year decrease of 0.5%. From January to February, my country's Internet xmaccount.companies above designated size achieved a total profit of 19.34 billion yuan, a year-on-year decrease of 6.2%. From January to February, my country's large-scale Internet xmaccount.companies invested a total of 12.45 billion yuan in R&D funds, an increase of 2.8% year-on-year, the same as in 2024.

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