The sell-off continues after China's swift response to tariffs announced on Wednesday 📌
Wall Street sentiment remains extremely negative after China announced a 34% tariff on all goods imported from the United States. CFDs on US indices are already seeing a several percent sell-off, with the US500 down 2.80%, the US100 down 3.10% and the US2000 a record 4.30%. Oil is falling even more on fears of a global slowdown in trade.
China's swift retaliatory response has heightened fears of a US recession and a global trade war. On Wednesday, Trump announced a wide range of tariffs for all trading partners, raising the average level of US tariffs to over 20% - the highest level in over 100 years. During the president's speech, the main argument was the introduction of retaliatory tariffs, which would restore the balance in trade. However, the level of the rates and the way they were determined were highly questioned in later comments by experts. Today's reaction from China, which came just two days later, however, eliminates the chance of no further escalation and rightly raises investors' concerns about the escalation of the conflict. It is possible that other US partners may follow China's example. For example, the European Union is already planning retaliatory tariffs if bilateral talks do not go as expected.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Currently, the market is pricing in a 50% chance of the first interest rate cut in May and almost 5 full cuts in the whole of 2025. Source: Bloomberg Finance L.P.
The declines are not bypassing European markets either. Currently, contracts based on the German DAX and the Polish WIG20 are losing almost 4.5%. Source: xStaiion
OIL
WTI and BRENT oil prices are seeing monstrous declines due to China's decision to impose retaliatory tariffs of 34% on the US.
WTI oil prices are dropping to their lowest levels since August 2021. Source: xStation
As such, today's price reductions for the raw material are reaching their largest magnitude since 2022. Source: XTB
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
