Live updates: ASX set for sharp decline after Wall St tumble on renewed trade war fears
And just like that, the tariff war exploded into the collective consciousness of just about every market as traders dumped risky assets and ran for the exits ahead of the weekend.
US President Donald Trump made his official announcement that he would impose an additional 100% tariff on imports from China, as well as export controls on critical US-made software, late in the day after the markets closed.
However, he gave traders a heads up in a social media post that he was weighing up a “massive” tariff increase on Chinese imports and said there is no reason to meet with China’s President Xi Jinping in two weeks as planned.
Mr Trump was reacting to a new package of export controls on rare earths and critical minerals China released on Thursday.
Having tracked sideways for a bit over an hour in early trade on Friday, Wall Street suddenly headed south at warp speed at 10:57am (US eastern time) — fear and algorithms did the rest with the key indices falling through to the close.
In a collapse not seen since early April, S&P 500 dropped 2.7%, the Dow shed 1.9%.
The tech-centric Nasdaq was the hardest hit, down 3.6% — Nvidia, Tesla, Amazon and Advanced Micro Devices all fell more than 2% after the bell.
European stocks tanked in a last-minute slide, the broad Eurostoxx600 closed down 1.2%, having hit record highs earlier in the week.
The global equities index, the MSCI fell more than 2%.
The ASX 200 looks likely to follow suit with futures trading pointing to a 0.9% decline on opening.
Brent and US crude oil futures fell around 3% to their lowest levels in six months.
US copper futures fell more than 5%, while soft commodities like US wheat and US soybeans dropped 1.5%.
Gold was the exception with some panicky money sending it back above the $US4,000/ounce level again.
“The second largest economy and the first largest economy are arguing again, and we’re seeing a sell first, ask questions later mentality to end the week,” Carson Group chief market strategist Ryan Detrick, told Reuters at the end of a torrid session.
“President Trump’s post did truly come out of nowhere, which opened the door for some extreme volatility.”
“And it’s important to remember we haven’t had this level of volatility in a long time,” Mr Detrick added.
“One could argue we were due for some spookiness this October.”
The US dollar index fell as did US treasury bond yields, although that didn’t support the Aussie dollar that dropped in the general “risk-off” trade.
Perhaps the biggest losers of the session were cryptocurrencies with Bitcoin down more than 8% on Friday and Ethereum down almost 6%.
The cryptos have since recovered a bit this morning as the temperature in what so far has been just a war of words between the US and China seems to have cooled over the weekend.