United States
In a volatile session on Monday, U.S. stocks recovered from initial sharp declines to finish with only marginal movements. The S&P 500 had fallen more than 4.5% before recovering to end the day with a modest decline of 0.23%, down 11 points to 5,062. The Dow Jones Industrial Average fell 349 points, closing at 37,965, a drop of 0.91%. The Nasdaq Composite managed to register a gain, rising 0.10% with a 15-point increase to 15,603.
Two sectors of the S&P 500 ended the day in the green: communication services and technology. The biggest losses were seen in the real estate sector, which dropped 2.4% as bond yields rose and risk assets stabilized. Trading volumes hit their highest levels in 18 years, with over 29 billion shares changing hands, compared to the average of 17 billion.
President Trump reiterated that there would be no change to U.S. tariff policy and threatened further tariffs of 50% on China unless they withdrew their 34% tariff by April 8th, U.S. time. He also mentioned that meetings requested by Chinese officials to discuss the escalation had been cancelled. Trump added that 50 nations had reached out to begin negotiations.
The threat of additional tariffs on China negatively impacted both Tesla and Apple. Apple dropped 3.67%, closing at $181.46, a decline of $6.92. Analysts reduced their targets for the company, with one noting that the current tariff slate on China and Taiwan “would be devastating to Apple.” Despite this, iPhone sales over the weekend were reported to be strong as consumers rushed to purchase new phones before the tariffs caused price increases. Tesla fell 2.56% to $233.29, as a leading analyst lowered his price target by 40%.
In contrast, other tech stocks rallied. Nvidia gained 3.53%, closing at $97.64, and Meta rose 2.28%, finishing at $516.25, as investors saw the recent price declines as a buying opportunity. Banks also recovered from their lows, with JP Morgan increasing 1.98% on a generally positive day for the sector.
U.S. bond yields jumped, with the 10-year note rising by 19 basis points to 4.18%, and the 2-year note increasing by 11 basis points to 3.76%. Credit spreads on investment-grade bonds continued to widen as investors expressed concerns about deteriorating global growth. The heightened market volatility led corporate issuers to halt bond issuance, with no new bonds coming to market. The U.S. dollar rose by 0.55% on the Bloomberg U.S. Dollar Index.
Volatility is expected to persist, with the VIX index closing higher at 46.98, having surged to 60 when U.S. markets reached their lows of the day. These levels reflect the concern that traders have, fearing that a news report or statement—whether positive or negative—could lead to sharp price swings. Data later in the week on CPI and PPI may provide an indication of the initial effects of the new tariff policies on Main Street.
Europe
Tariff tensions and a renewed threat from U.S. President Trump to raise tariffs against China led to a further decline in European stock markets at the start of the week. The Euro Stoxx 600 dropped 4.50%, closing at 474.01, while the UK’s FTSE fell 4.38%, settling at 7,702 with a 353-point decline. The indexes initially continued to decline in the opening hours of trading before stabilizing and briefly rallying on news (later proven false) that Trump was considering a pause on tariffs for all countries except China. Prices then retreated as the day closed.
All sectors of the European index saw losses in a broad-based selloff. Utilities were the worst-performing sector, falling 5.9%, marking the worst performance in five years. Energy stocks also declined, with Shell dropping 5.3% after announcing a reduction in its expected gas production due to unplanned maintenance at some Australian operations and adverse weather. British Petroleum saw a 5.9% decline.
Aerospace and defence contractors also saw declines as investors reduced their exposures following strong performance in recent months. This sub-sector fell by 4.49%, with Airbus dropping 7.79%. Germany’s Rheinmetall finished the day down 2.51%, after initially plunging 27% at the open, before recovering. The CEO of Rheinmetall, Armin Papperger, reportedly bought shares in the company during the drop, increasing his stake.
In the UK, house prices unexpectedly declined in March, as the end of a tax concession for less expensive homes and a first-time homebuyer scheme took effect. House prices fell by 0.5%. In the Eurozone, investor sentiment reached its lowest point in more than a year, with the Sentix Index dropping to -19.5 in April, compared to -2.9 in March.
Bond yields were higher across the board, with the German 10-year bond rising by 3 basis points to 2.61%, and the UK’s equivalent jumping 16 basis points to 4.61%.
Australia
The Australian equity market closed significantly lower on Monday, with a loss of 324 points, or 4.23%, finishing at 7,343.00—its lowest level since December 2023. The market did recover from initial morning lows, where it had dropped by 6.5% before making a comeback. Among the major Asian markets, the Australian market performed the best, despite sharp declines elsewhere: Hong Kong’s index fell 13.22%, while the Nikkei dropped by 7.8%. Over the weekend, comments from key figures in the US administration confirmed they would not alter tariffs, fuelling growing concerns that a global recession could result from the US’s imposition of high tariffs. At the close of the ASX 200, S&P 500 futures were down by 3.6%.
All sectors of the ASX 200 finished lower, with energy and financials leading the declines. The energy sector dropped 6.95%, while financials fell by 4.94%. Woodside dropped 5.78% to $19.25 as oil prices continued to decline in the Asian time zone. The company also announced on Monday that it would sell 40% of its stake in Louisiana LNG to Stonepeak, a leading alternative investment fund specializing in infrastructure and real estate, based in the US, for US$5.7 billion. Stonepeak will contribute 75% of the project’s capital expenditure in 2025 and 2026, improving the project’s economics. Uranium miner Paladin Energy fell by 9.63%, losing 44 cents to close at $4.12.
The materials sector declined by 4.84% as iron ore prices remained under pressure. BHP added to its loss from Friday, falling 6.11% to $34.57, making a further 30-cent drop from the NY close on Saturday. RIO also declined, dropping 3.82% to $108.40. On a positive note, rare earth miner Lynas gained 3.15%, rising by 23 cents to close at $7.54. Other rare earth companies listed in China also saw gains, with China Rare Earth Holdings up as much as 10%, following the imposition of export restrictions to the US as part of China’s response to US tariffs.
In the financial sector, declines were steep as investors anticipated the secondary effects of a slowing economy, including higher arrears and lower deal flow. CBA fell 6.23% to $144.41, and Westpac dropped 5.61% to $29.25. However, Macquarie Bank was an outperformer, falling only 0.84% to $172.54 after several days of substantial declines.
Technology stocks had a mixed performance, with NextDC falling 5.73%, and Life360 dropping 7.05% to $16.74, a $1.27 decline. Conversely, WiseTech rallied 2.23%, gaining $1.67 to reach $76.50 as traders saw value in the stock, which had already been heavily sold off.
The decline in risk asset prices resulted in further declines in bond yields, with the 10-year bond falling 12 basis points to 4.09%, and the 2-year down 14 basis points to 4.25%. This reflects both a flight to safety and an increasing belief that the RBA, along with global central banks, will lower rates in response to a slowing world economy.
The stabilisation of US markets overnight has seen the ASX200 futures move higher, closing with an increase of 59 points the equivalent of a 0.80% gain. The AUDUSD begins Tuesday at 0.5990.
Commodities
Oil prices started the week with a decline but recovered from session lows, which saw oil fall by as much as US$3 during the Asian trading session. During this time, Saudi Arabia reduced its prices for Asian buyers to their lowest levels in four years, reflecting lower global prices and increased production. By the end of U.S. trading, West Texas Intermediate (WTI) had fallen US$1, a 1.61% decline, settling at US$60.99. Brent Crude dropped 1.75%, closing at US$64.43. Leading investment banks lowered their 2026 price projections by more than 6%, while also increasing the likelihood of a U.S. recession in their models. The U.S. Energy Information Administration (EIA) delayed the publication of its “Short Term Energy Outlook” report, citing market volatility and new global trade policies that impacted the reliability of its conclusions.
Copper prices continued their downward trend, although the declines slowed to a 0.54% drop, falling by US$48 to US$8,732 per tonne. In the U.S., copper prices were even lower, with the Comex contract falling by 4.8%. Chile’s top producer, Codelco, reported an increase in production for the first quarter of 2025, with the Chairman expressing confidence in long-term demand due to the ongoing energy transition, which he believes will outweigh the impact of tariffs. Iron ore prices remained largely unchanged, dropping by 50 cents to US$97.50, reflecting a 0.51% decline.
Gold continued its pullback, impacted by a stronger U.S. dollar. The price of gold fell US$54.86, or 1.81%, to US$2,983. Traders also noted that gold holdings had been reduced, as investors sought to raise cash to cover margin calls on losses in other assets. Meanwhile, silver rose by 1.79%, reaching US$30.11. Bitcoin remained stable at US$78,891, recovering from an initial dip below US$75,000.
Economic Calendar
AU:
- Westpac Consumer Confidence (Apr) – 11:30am
- NAB Business Confidence (Apr) – 11:30am
US:
- NFIB Small Business Optimism index (Mar) – 9:00pm
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
