Stocks sold off globally on Thursday morning, following US president Donald Trump's unveiling of sweeping tariffs. The UK's FTSE 100 (^FTSE) slumped 1% and the pan-European STOXX 600 (^STOXX) was 1.4% in the red at the time of writing. In the US, S&P 500 futures (ES=F) fell nearly 3%.
The UK was included on the list of countries that would face the 10% baseline tariff rate. There will be a 20% levy on imports from the EU.
Stocks were down amid investor nervousness as to how countries would retaliate to Trump's tariffs, with fears over how an escalating trade war would impact the global economy.
All of the Magnificent 7 tech giants — comprising of Nvidia (NVDA), Apple (AAPL), Tesla (TSLA), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Meta (META) and Amazon (AMZN) — were down in pre-market trading on Thursday.
Shares in chipmaker Nvidia (NVDA) were down 3.4% in pre-market trading, with other chip stocks also caught up in the sell-off. Broadcom (AVGO) shares were down 4.4% after-hours, while Advanced Micro Devices (AMD) was 4.2% in the red and US-listed shares of TSMC (TSM) fell 4.2%.
Shares in electric vehicle (EV) maker Tesla (TSLA) were down 3.7%, with the stock having already been under pressure amid backlash against CEO Elon Musk.
There have been protests around the world at Tesla (TSLA) facilities against Musk's political activities, the billionaire's role as a close adviser to Trump, heading up his Department of Government Efficiency (DOGE) and overseeing cuts to government agencies.
Tesla (TSLA) shares rose in Wednesday's session, following a report from Politico that said Musk was set to pare back his duties in the Trump administration "in the coming weeks." However, Musk later dismissed the reports, calling them "fake news" on his social media platform X.
Meanwhile, data has also shown that Tesla (TSLA) sales have been stalling across several countries. Earlier on Wednesday, Tesla report reported first quarter global deliveries that widely missed estimates as demand issues clearly hit the electric vehicle maker.
For the quarter, Tesla (TSLA) reported 336,681 deliveries compared to 390,342 expected, according to Bloomberg consensus estimates, making it the worst quarter for deliveries since the second quarter of 2022.
US retail stocks were also hit by the tariff announcement in after-hours trading, with sportswear brand Nike (NKE) down nearly 9% in pre-market trading on Thursday.
Nike (NKE) used factories in Vietnam to manufacture approximately 50% of its footwear and 28% of its apparel in 2024, according to the company's annual regulatory filings.
Trump announced a 46% reciprocal tariff rate on Vietnam on Wednesday, which would take effect on 9 April. There are concerns about the increased costs on companies from the tariffs and disruption to their supply chains.
Dan Coatsworth, investment analyst at AJ Bell (AJB.L), said that the tariff rate on Vietnam was "problematic for a lot of firms which have shifted manufacturing from China to Vietnam in recent years.
“Vietnam is a major producer of clothing, footwear, furniture and toys. Dr Martens (DOCS.L) is one of the many companies reliant on Vietnam for a lot of its products and it will now be looking hard at alternative sources.”
Shares in pharmaceutical stocks rose on Thursday morning, as it appeared that the sector had been exempt from this latest wave of tariffs.
A factsheet released by the White House on Wednesday said that some goods would not be subject to reciprocal tariffs, which included pharmaceuticals. However, the factsheet also said that this list of goods could be come subject to levies in the futures under section 232 of the Trade Expansion Act.
In a note on Thursday, Barclays analysts said: "We tuned into the Rose Garden speech last night, and as had been previewed in media reports this week, didn't get much in the way of pharma-specific announcements."
"That said, it is unlikely that we are out of the proverbial woods yet, as we could see sectoral tariffs announced in the coming weeks," they added, pointing to one-sector specific quote from Trump in his levies announcement.
"Pharma companies are going to come roaring back, they're coming roaring back, they're all coming back to our country, because if they don't, they got a big tax to pay," said Trump "And if they do, I'll be very happy."
Asia-Pacific-focused bank Standard Chartered (STAN.L) was the biggest faller on the FTSE 100 (^FTSE) on Thursday morning, with shares down nearly 9% at the time of writing.
A number of countries in Asia were hit with Trump's higher rates of tariffs, including China (34%), Taiwan (32%), Japan (24%) and Thailand (36%).
Deepali Bhargava, regional head of research at ING, said: "President Trump’s punitive tariffs hit Asia, with largest levies on Vietnam and smaller textile exporters. The largest economies in the region, such as India, Japan, and South Korea, fared better.
"Overall, downside risks to growth and inflation could accelerate monetary policy easing and add to depreciation pressures on currencies."
