SINGAPORE/LONDON, April 11 – Global financial markets closed the week in disarray as a storm of escalating trade hostilities between the United States and China rattled investor confidence, sending stocks on a volatile rollercoaster and causing the dollar to nosedive.
Friday saw a frenzied end to a turbulent week as investors scrambled to reposition themselves amidst growing concerns over the future of U.S assets. With the world’s two largest economies locked in a full-blown tariff war, traditional market anchors have crumbled, sparking sharp swings in equities, bonds, and currencies.
The dollar suffered a significant blow, falling to a 10-year low against the Swiss franc and a six-month trough versus the yen. As safe-haven demand intensified, the euro surged by 1.7%, reaching $1.13855 – its highest level since early 2022. Meanwhile, gold continued its upward march, climbing to yet another record high as global uncertainty deepened.
Trade War Escalation Shocks Markets
Investor sentiment has been increasingly fragile since the U.S administration escalated its trade offensive by imposing sweeping tariff hikes on Chinese imports, raising effective duties to a punishing 145%. In a swift response, Beijing retaliated by lifting its own tariffs on American goods to 125%, marking a significant escalation in the economic standoff.
The fallout from these moves was immediate. Currency markets reacted sharply, with capital flowing out of dollar assets and into perceived safe zones such as the eurozone and Switzerland. The Chinese yuan also experienced renewed pressure, further complicating the global trade picture.
Equity markets reflected this chaos. European shares, which had plunged as much as 1% in earlier trading, managed to claw back some losses by the day’s end, with the STOXX 600 (.STOXX) index inching up by 0.1%. Despite the modest rebound, the index remains down nearly 1.7% for the week — one of its most turbulent in years.
U.S. Bonds Flash Warning Signs
Amid the broader market upheaval, U.S Treasuries were also caught in the storm. After a dramatic selloff earlier in the week, yields on the benchmark 10-year note ended at 4.4%, up a massive 45 basis points since Monday — the sharpest weekly increase since 2001.
The rise in yields, which move inversely to bond prices, is typically seen as a sign of either inflation expectations or economic optimism. However, analysts suggest this time it reflects something more concerning: a potential crisis of confidence in the long-term stability of U.S government debt.
Some market experts have suggested that this week’s moves could be a reflection of deeper structural issues. With debt levels ballooning and economic growth forecasts becoming murkier, there is mounting concern that the U.S fiscal position is becoming increasingly unsustainable.
“With U.S-China tariffs now so elevated, it’s conceivable that bilateral trade in many goods will slow to a trickle, leaving only essentials or high-margin items flowing between the two economies,” said one strategist. “This situation may significantly challenge the dollar’s long-standing position as the world’s leading currency.”
Leadership Seeks to Calm Markets
As markets churned, top officials in Washington sought to ease investor nerves. Treasury Secretary Scott Bessent attempted to reassure stakeholders during a cabinet meeting on Thursday, noting that over 75 countries had shown interest in opening new trade discussions with the U.S.
President Trump, while maintaining a firm stance on China, hinted that a resolution might still be possible, expressing optimism that negotiations could eventually bear fruit.
However, many analysts remain skeptical. James Athey, a senior portfolio manager, noted that uncertainty is as pervasive now as it was a month ago. “There’s still a great deal of uncertainty,” he said. “Markets seem to be reacting more to confusion than to any clear direction.”
In the U.S, futures for the S&P 500 and Nasdaq saw erratic behavior throughout the session. Both indexes swung wildly, falling by as much as 2% in early trading before staging a rebound of up to 1.6%, reflecting the jittery nature of the current environment.
Safe Havens Surge, Commodities React
The trade war-driven anxiety has triggered a fresh wave of capital into safe-haven assets. Gold, long considered a barometer of crisis sentiment, climbed 1.2% to an all-time high of $3,212 per ounce, as nervous investors sought security amidst the market turmoil.
Oil prices, however, told a different story. While crude benchmarks edged up modestly on Friday, gains were modest and insufficient to erase weekly losses. Brent crude futures rose 0.35% to $63.54 per barrel but remain on course for a second straight weekly decline, weighed down by concerns of weakened global demand due to prolonged trade conflict.
Recession Fears Creep Back In
As the week draws to a close, fears of a potential recession are again resurfacing, driven in part by the dramatic selloff in longer-dated U.S bonds. The 30-year Treasury yield climbed to 4.90%, marking its biggest weekly spike since at least the early 1980s.
Some investors interpret the selloff as a signal that institutional players are repositioning away from riskier debt, possibly in preparation for a slowdown or even a full-blown economic contraction.
“What we’re witnessing in the bond market may not be about inflation,” commented a senior fund manager. “Rather, it could be a sign that the outlook for U.S fiscal sustainability is becoming increasingly fragile — especially if growth slows and deficits balloon.”
Uncertainty Reigns
With global markets under pressure from multiple fronts trade, growth, inflation, and geopolitical instability investors are bracing for more volatility ahead. As one strategist in Singapore put it, “The near-term view for risk assets remains unclear. Investor sentiment is highly volatile, and at the moment, a definite direction is difficult to pinpoint.”
The combination of heightened trade tensions, shaky bond markets, and a fleeing dollar has left global markets in a state of flux. Until there’s a breakthrough in trade relations or a calming signal from economic leaders, the volatility is likely to persist — leaving investors holding their breath and bracing for whatever comes next.