Australian Markets Crash as Global Panic Spreads
Australian financial markets are in turmoil as Donald Trump’s sweeping tariffs send shockwaves across the global economy. The Australian Dollar (AUD) has collapsed to a five-year low, while the S&P/ASX 200 index has plunged over 4% today, wiping billions from the market.
At 1:08 pm AEST, the ASX 200 was down 315.50 points, hitting a fresh 100-day low of 7,352.30. Investors are fleeing risk assets, with mining companies and the big four banks among the hardest hit. The ASX had already suffered a $160 billion loss at the open, with $100 billion still wiped out by midday.
Trump’s Tariff War Escalates Global Market Panic
Trump’s aggressive trade policy has intensified fears of a global economic downturn. On Friday, he announced sweeping reciprocal tariffs on China and the European Union, triggering a massive sell-off in global equities.
The US President defended his decision, saying, “They took our businesses, they took our money, they took our jobs. It’s not sustainable.”
China wasted no time in retaliating, slapping a 34% tariff on US imports and restricting exports of rare earth elements crucial to American technology companies. Beijing called Trump’s tariffs “typical unilateral bullying” and vowed to fight back.
Trump displays a reciprocal tariffs poster during a White House announcement.
[Credit: Kent Nishimura/Bloomberg]
ASX Sell-Off Deepens as Investors Panic
The ASX 200 index is facing its worst five-day decline in years, down nearly 8% this week. Over the past year, the index has shed 5.42%, reflecting worsening investor sentiment.
Biggest Decliners on the ASX Today:
- HMC Capital Limited: -13.32%
- Deep Yellow Limited: -12.02%
- Paladin Energy Ltd: -11.59%
- Mineral Resources Limited: -10.24%
- Boss Energy Ltd: -10.22%
Across all sectors, financials, energy, and materials have suffered the steepest losses. Energy stocks are down 5.82%, while materials have fallen 5.09%. Banks are also under pressure, with the financials sector declining 4.70%.
Australian Dollar Sinks to Lowest Level in Five Years
The Australian Dollar has plunged below 0.6050 against the US Dollar, marking its worst level since 2020. Traders fear that widening interest rate differentials between the US Federal Reserve and the Reserve Bank of Australia (RBA) will drive the AUD lower.
Westpac economist Ryan Wells noted that “stock market volatility has spiked to a new post-pandemic high as the historic sell-off in global equities persists.”
Economists Warn of an RBA Rate Cut
With markets in freefall, analysts believe the RBA may be forced to slash interest rates to stabilise the economy.
Shane Oliver, chief economist at AMP, stated, “Trump’s tariffs will slow global growth, and that spillover effect will hit Australia.”
The market is now pricing in at least two RBA rate cuts this year, with some predicting a 50-basis-point reduction as early as May.
Wall Street Plunges as Recession Fears Grow
The Australian market downturn follows a historic rout on Wall Street. The Dow Jones, Nasdaq, and S&P 500 all fell over 5% on Friday as investors fled stocks in anticipation of a prolonged trade war.
Barstool Sports founder Dave Portnoy voiced his frustration, saying, “He just cost me $7 million in a week!”
IG Markets analyst Tony Sycamore warned that “fears of a full-blown trade war, imminent recession, and a liquidity crunch last seen during the COVID crash of 2020” were now gripping global markets.
Peter Dutton Blames Labor for Economic Turmoil
Opposition Leader Peter Dutton used today’s market chaos to criticise the government’s economic management.
“The Coalition has the proven track record for handling global shocks – from September 11 to COVID,” Dutton wrote on X.
He accused Labor of reckless spending and argued that “just over a week ago, in their fourth budget, Labor announced 10 straight years of deficits.”
Experts Fear a ‘Race to the Bottom’
Capital.com senior analyst Kyle Rodda believes the world could be entering a destructive trade war.
“The firing gun for the race to the bottom on global trade has been fired,” Rodda said. “Market participants are hoping this will eventually be called off.”
If tensions continue to escalate, analysts predict further market turbulence, more interest rate cuts, and a possible global recession.
Where to Next for Australian Investors?
With global markets in turmoil, investors are bracing for further volatility. The ASX’s next major support level sits near 7,200, while the Australian Dollar may continue to weaken if the RBA cuts rates.
Traders are now watching:
- Whether Trump escalates tariffs further.
- China’s next move in retaliation.
- The RBA’s response to economic headwinds.
For now, Australian investors face a stormy outlook as Trump’s tariff war wreaks havoc on financial markets.
