Global Markets in Free Fall Due to Trade Tensions

Global stock markets were hit hard by the escalating trade tensions. On Friday, April 4, the intensification of the trade conflict between the United States and China triggered widespread panic in stock markets. After the announcement of tariffs by Donald Trump, China’s response, with new tariffs on American imports, heightened fears of an escalation between the two largest economic powers in the world.

A Terrible Week for the CAC 40

The Paris Stock Exchange closed out this difficult week with a 8.10% drop over the entire week, its worst performance since February 2022. On Friday, April 4, the flagship index, the CAC 40, lost 4.26%, reaching a low of 7,274.95 points, its lowest level since March 4, 2022. The impact of the trade war is felt across all European stock markets, with Frankfurt, London, and Zurich seeing drops of over 4%. In Italy, the Milan Stock Exchange plummeted nearly 7%.

A Chain Reaction Across European Markets

The consequences were immediate and severe, especially affecting cyclical stocks. Société Générale lost 10.45%, Unibail-Rodamco Westfield dropped 9.25%, and Saint-Gobain saw its stock fall by 7.8%. In addition to the uncertainty caused by the tariffs, another worrying piece of news weighed on the market: Scor, the reinsurer, announced its indictment for obstruction of an acquisition, causing its stock to plummet by more than 10%.

Wall Street Follows with a Steep Decline

As European markets pulled back, Wall Street was not spared from the turmoil. At the opening, U.S. indices showed significant losses, with the Dow Jones dropping 3.07%, the Nasdaq falling 3.48%, and the S&P 500 declining 3.47%. Panic was palpable, with risk aversion spreading worldwide.