Tariff turmoil wipes trillions of dollars off global markets

Drawing comparisons to the market crashes witnessed at the height of the pandemic and 2008 financial collapse, the sell-off swept the globe, sending exchanges plunging in Asia and Europe.

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The FTSE 100 index of blue-chip companies closed down 133 points, or 1.5%, at 8,474 after its worst day since August.

When New York trading opened, the S&P 500 index of the US's leading companies fell by as much as 4.3% in morning trading, with the tech-heavy Nasdaq down 5.1%.

Libby Cantrill, head of US public policy at Pimco, the world's largest bond fund manager, said investors were growing increasingly concerned as Trump appeared to be unwilling to soften his stance in the face of market turmoil, although hope remained that he would ultimately strike deals with US trading partners.

"There is likely a limit to how much pain he and his administration are willing to endure in order to rebalance the economy, but when that is or what that looks remains to be seen," she said. "For now, we should assume his pain tolerance is pretty high and that tariffs stick around for a while."

Meanwhile, the US dollar hit a six-month low, falling by about 2.2% yesterday morning, amid a growing loss of confidence in a currency considered the safest in the world for most of the past century. Warning clients to beware a "dollar confidence crisis", George Saravelos, head of foreign exchange research at Deutsche Bank, said: "The safe haven properties of the dollar are being eroded."