- FTSE 100 down 352 points at 7,702
- European and Asian markets also plunge
- Oil prices fall to lowest since 2021
- Markets still reacting to US tariffs and responses
4.36pm: Trump warns he will ramp China tariffs higher
Scrub that. The FTSE dives back down again, finishing 4.4% lower, and so does Wall Street.
Donald Trump has warned in a social media post that he will ramp up tariffs on China even further, in response to the People’s Republic response to his ’reciprocal’ tariff announcement last Wednesday.
He says that China "yesterday [it was Friday] issued Retailiatory Tariffs of 34% on the US, on top of their already record setting Tariffs, Non-Monetary Tariffs, Illegal Subsidization of companies, and massive long term Currency Manipulation, despite my warning that any country that Retaliates against the US by issuing additional Tariffs, above and beyond their already existing long term Tariff abuse of our Nation, will be immediately met with new and substantially higher Tariffs, over and above those initially set."
Trump then added: "Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th.
"Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately. Thank you for your attention to this matter!"
Currently, the US has a 34% tariff on all goods coming from China, with this rising to 54% on some goods.
4.03pm: FTSE the least worst in Europe, Wall Street regains balance
The FTSE 100 is down roughly 200 points or 2.5% but several constituents of the index are now in positive territory.
Over the Channel, the DAX and CAC are both still recording losses of at least 3.5%.
US stocks are now mixed, with the S&P 500 and Nasdaq both in green.
This morning the best performing UK stock was down 2%, but now there are over a dozen London blue-chips with prices in green.
Precious metals miners Fresnillo PLC (LSE:LON:FRES) and Endeavour Mining PLC (LSE:LON:EDV) are among them, up over 2%, as is the more industrial metals-focused Anglo American PLC (LSE:LON:AAL) and Rio Tinto Ltd (LSE:LON:RIO).
Ladbrokes owner Entain PLC (LSE:LON:ENT) and housebuilder Taylor Wimpey PLC (LSE:LON:TW.) are others up over 2%.
Lloyds, easyJet (LON:EZJ), Howden Joinery, BAE Systems (LON:BAES) and M&S too.
Newly propping up the index are RELX PLC (LSE:LON:REL), Reckitt Benckiser Group PLC (LSE:LON:RKT), Melrose Industries (LON:MRON) PLC (LSE:MRO) and AstraZeneca PLC (LSE:LON:AZN), among a group of 10 all still down 5% or more.
3.41pm: Source of misleading headline revealed
Some headlines that lifted markets were not very accurate reporting, it has to be said. But they were corrected very quickly.
"Fake news" the cries will come.
Here is the video of the exchange on the CNBC interview that spawned the misleading headlines.
KILMEADE: Would Trump consider a 90 days pause in tariffs?HASSETT: I think the president is gonna decide what the president is gonna decide ... even if you think there will be some negative effect from the trade side, that’s still a small share of GDP pic.twitter.com/3KymvgOwQG
— Aaron Rupar (@atrupar) April 7, 2025
3.29pm: What’s going on?
US markets, after opening with steep drops, quickly erased most of their deficits after a headline attributed to White House economic adviser Kevin Hassett that President Trump was considering a 90-day pause on tariffs.
This would be on all countries except China. No attribution was given for the headline.
It was followed by an 8% surge in the S&P 500.
Then CNBC reported that "no one at the White House is aware of a 90-day pause" and the S&P plunged back down 3.5%, all within a few seconds.
2.47pm: EU makes tariff offer to US, while UK focused on internal solutions
The EU has "offered zero-for-zero tariffs" to the US, European Commission president Ursula von der Leyen has just said.
Europe "is ready to negotiate with the US" and has made the offer on industrial goods
"But we’re also prepared to respond with countermeasures. And protect ourselves against indirect effects through trade diversion."
Meanwhile, back in Westminster, a slight shift in tone from Kier Starmer has been detected.
Interesting but subtle shift of emphasis by Starmer in answering @ChrisMasonBBC. Asked if Gov can shield people from Trump PM says UK will continue to work on a potential UK/US trade agreement BUT this is the time to step up on our side. Last week the trade deal was the answer...— Kate McCann (@KateEMcCann) April 7, 2025
This was in response to the Prime Minister’s speech at the Jaguar Land Rover factory in Birmingham.
Media reports say he did not emphasise any reduction of trade barriers, more that the government is focusing on growth and helping sectors particularly affected by tariffs, though without much detail to back this up apart from auto industry measures announced overnight.
The top line is that carmakers now have until 2030 to end new petrol and diesel car sales, while full hybrids will be allowed to remain on sale until 2035.
2.42pm: Wall Street in a bear market
Wall Street is in a bear market, with the S&P 500 having opened down 3.8%, on course for a 20% fall from its peak in February.
The Dow Jones is down almost 1500 points at just under 4%, while the tech-heavy Nasdaq is 4.2% lower so far.
Tesla shares are down 8.7%, following long-time bull Dan Ives at Wedbush turned bearish on his favourite stock.
Ives took a knife to his price target for the electric carmaker, slashing from $550 to $315 due to the self-inflicted brand damage and the sweeping global tariffs introduced by the Trump’s administration.
14.27pm: Market may soon have sold off enough, says technical analyst
The fear gauge, better known to some as VIX, or to give the measure its full title, the CBOE Volatility Index, is in focus today, as it hit higghts not seen since the first COVID lockdowns in early 2020.
A rising VIX is associated with increased fear and uncertainty in the marketplace and falling stock prices, and vice versa for a declining index, says Analyst Adam Turnquist at LPL Financial notes, who notes that the index represents implied 30-day volatility derived from the aggregate values of a weighted basket of S&P 500 puts and calls over a range of strike prices.
The VIX, which is also used as a sentiment gauge and to hedge equity positions, hit 60 this morning, its highest (apart from the weird August 2024 mini-crash) since 2020.
Readings in the 40s, 50s and 60s are "not only historically rare, but they also often overlap near major capitulation points in market sell-offs", says Turnquist.
He says research has found that readings based on VIX intraday highs have "historically been the most significant signal for identifying a capitulation", since 1992, when the intraday VIX high reached 30.1 or more, one-month, six-month, and 12-month S&P 500 returns averaged 1.5%, 7.4%, and 15.6%, respectively.
The VIX futures curve has also moved deep into "backwardation", which is another rare occurrence that happens when near-term futures become more costly than longer-dated futures.
"Periods of backwardation are also associated with panic-type selling and often overlap with market capitulation points," he says.
"We continue to watch for stocks to find support amid this historic sell-off. Technical damage has been severe but importantly, the thresholds for panic and washed-out/oversold market conditions have now largely been met."
13.22pm: Trump berates China for tariff retaliation
Donald Trump is awake and firing out social media posts.
"Oil prices are down," he noted in a post on his Truth Social platform, and interest rates "are down", he adds, presumably pointing to anticipated moves.
He says, "food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place", he adds, mixing things that are the case now with things he anticipates for the future as suits his argument.
Trump says China is "the biggest abuser of them all", with its markets "crashing" after it raised its tariffs 34%, which he says is "on top of its long term ridiculously high tariffs".
He says China was ignoring his "warning for abusing countries not to retaliate".
12.50pm: Wall Street selling expected
US stock futures have eased off from their worst, ahead of Wall Street’s first opening bell of the week.
Dow Jones futures are down just around 800 points or 2.1%, compared to over 1300 earlier.
Futures for the S&P 500 are down 2.4% and for the tech-heavy Nasdaq 100 down 2.7%.
The FTSE 100 is down 4.4%, roughly in line with declines in Europe.
12.10pm: JPMorgan CEO’s warning on tariffs
JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon has struck a cautious tone in his annual letter to shareholders, warning that recent tariffs are likely to push inflation higher and have increased the likelihood of a recession.
The tariffs announced by Donald Trump, including a blanket 10% tariff around the world and extra ’reciprocal’ tariffs on some nations last week, "will likely increase inflation and are causing many to consider a greater probability of a recession", Dimon wrote.
"These significant and somewhat unprecedented forces cause us to remain very cautious."
In the short-term, inflation is likely to be seen not only on imported goods but also on domestic prices, as input costs rise and demand increases on domestic products.
"How this plays out on different products will partially depend on their substitutability and price elasticity. Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth."
11.50am: Companies highlight tariff avoidance strategies
A few London companies with updates out today have mentioned the US tariffs, including relatively new arrival Applied Nutrition PLC.
The sports nutrition and wellness brand, which floated in October, said it "does not expect to be materially impacted by changing US tariffs," adding that its options to mitigate the impact could include moving production some products currently produced in the UK to the US.
The shares are down 3.6% today and 24% since the IPO.
Elsewhere, Volex PLC (AIM:LON:VLX) is up 9% as it said its profits are expected to be well ahead of the top end of market estimates.
The manufacturer of critical power and data transmission products highlighted its "agile global footprint" that allows it to shift production locations and mitigate potential disruptions.
It said the "evolving tariff landscape" was leading to clients being "cautious about making short-term supply chain decisions", which was enhancing its role in supporting procurement activities, and highlighted its role as a critical and often sole supplier of complex components, with the ability to pass on tariff-related costs to customers, reinforcing its strong market position.
11.29am: Shelter in drinks and tech?
When markets turn stormy, investors look for shelter.
Panmure Liberum analyst Susana Cruz suggests this might involve investing in high-quality companies with steady earnings, strong balance sheets and limited exposure to global turmoil.
Screening the London market for “quality defensives” turns up 14 British companies that can weather the economic squalls stirred up by trade tension.
The list includes tobacco pair BAT (LON:BATS) and Imperial Brands (LON:IMB), healthcare like GSK (LON:GSK) and Hikma Pharmaceuticals (LON:HIK), drinks and some software.
11.13am: Losses trimmed a bit
The FTSE 100’s losses are below 300 now, a 3.6% fall on the day compared to the opening 6% drop.
BAE Systems has gone from a 6%-plus decline early on to now being the ’least down’ blue-chip at -0.7%.
Lender Lloyds Banking (LON:LLOY), bookmaker Entain and houesbuilder Taylor Wimpey are next on the ’not falling as much’ list, all down less than 1%.
Fallers are led by Intermediate Capital Group (LON:ICGIN) (LSE:ICP), Melrose Industries PLC (LSE:MRO, OTC:MLSPF) and tech investors Scottish Mortgage Investment Trust PLC (LSE:LON:SMT) and Polar Capital Technology Trust PLC (LSE:LON:PCT).
10.16am: New rules for investment trusts and for venture capital trusts
The City regulator says it is proposing softening the rules for alternative asset managers, "to make it easier for firms to enter the market, grow, compete and innovate".
A "more streamlined and proportionate regime" for investment trusts and for venture capital will "make it easier for firms to operate globally, while encouraging effective risk management," the Financial Conduct Authority says in a statement.
Simon Walls, interim executive director of markets for the FCA, said the regulator want rules to be "better tailored to UK investment managers", to allow them to operate more efficiently.
Working with HM Treasury, the FCA is considering creating new separate rules for investment trusts and for venture capital firms due to those sectors’ distinct characteristics.
A consultation has been launched today, with FCA calling for comments on its proposals before 9 June and the consultation to be concluded in the first half of 2026.
10.04am: Markets off their worst, but still bad
European markets are off their worst, but are still on course for their worst day since the pandemic.
The FTSE 100 is down 370 points or 4.6% now, while Germanby’s DAX is down 5.7% and France’s CAC 5.6%.
9.34am: House prices fall, but ear
UK house prices fell 0.5% in March, according to data from Halifax, which followed a 0.2% drop in February.
The average property price was £296,699, a decline of £1,575 compared to the previous month.
Compared to a year ago, prices were up 2.8%, the same annual rate as in February.
It comes after a spike in house prices rose in January as buyers rushed to beat the March stamp duty deadline, with last month seeing the busiest single day on record for house sales for Halifax customers.
"However, with those deals now completing, demand is returning to normal and new applications slowing," said Amanda Bryden, Halifax’s head of mortgages, and it was "unsurprising" that house prices fell back last month.
"Our customers completed more house sales in March than in January and February combined, including the busiest single day on record."
Looking ahead, Bryden said potential buyers "still face challenges", including higher Bank of England interest rates, a "limited supply" of available properties to choose from and the uncertain economic outlook.
"However, with further base rate cuts anticipated alongside positive wage growth, mortgage affordability should continue to improve gradually, and therefore we still expect a modest rise in house prices this year."
9.22am: Rate cuts predicted
While the Bank of England held interest rates at 4.5% in March, markets are now anticipating the possibility of further rate cuts due to falling inflation and global economic challenges, mainly sparked by the new US tariffs.
This could see lenders start offering slightly lower fixed-rate mortgage deals.
Traders this morning are predicting there will be a BoE interest rate at the next meeting, in early May, and at least three more cuts this year.
Money markets are pricing over a 90% chance of a quarter-point BoE cut for the May meeting.
A total of 86 basis points of cuts are priced in, implying at least three quarter-point cuts.
9.05am: Any hope yet?
There has been "some ’good’ news" from China this morning", says Kathleen Brooks, research director at XTB, and some hope via a tweet.
Reports out of China suggest Beijing is discussing bringing forward stimulus measures to counter the effect of tariffs and boost consumption, although Brooks notes this "only took a slight edge off the sell off".
Markets are looking for "concrete action, not talk of action".
Brooks wonders, as others earlier, if there is a buying opportunity on the cards.
"At the start of a new week, instead of focusing on economic data and dissecting an extremely strong March payrolls figure from the US, traders and investors are assessing the chances of a stock market recovery after last week’s sharp sell off.
"After such sharp losses, this should be the buying opportunity of the century, however, as you can see above, early signs are not good on Monday."
She calls the decline in risky assets "staggering", with the Nasdaq’s 10% and the S&P 500’s 9% decline in the past week, with the FTSE 100 down nearly 7% in just two days.
"The focus now will be on individual bilateral trade deals," Brooks says, with Vietnam for example, offering to remove tariffs on US goods imports, which caused shares in Nike (NYSE:NKE) and Lululemon to surge more than 3% each on Friday, as they have large production centres in Vietnam.
TSMC still sold off 7.6% today even after Taiwan announced on Sunday that the country would offer the US zero tariffs on all US goods imports, and ruled out retaliatory tariffs on the US.
Brooks highlighted that "the most interesting development from a trading perspective" was a tweet from Pershing Square (LON:PSHP) hedge fund boss Bill Ackman, who has close ties to the Trump White House.
He said he expects Trump to postpone the implementation of tariffs on Monday, to give him the chance to "make deals" after using last week’s announcement to get the world’s attention about US trade.
8.46am: Are tariffs a Trump bargaining tool or here to stay?
While Trump showed no sign of backing down, other US administration officials gave contradictory statements on trade taxes, which Paul Donovan, chief economist at UBS Global Wealth Management, says is "causing investors to question the existence of a masterplan".
Attempts by the members of Trump’s cabinet to justify tariff attacks on the Heard Island penguins "only emphasized the peculiarity of the tariff formula".
Trump took time from his golf weekend to post twice on social media that the falls in stocks were "on purpose".
Donovan adds: "Investors had assumed Trump’s trade taxes were a bargaining tool, as during the first term. That depends on competent policymaking to balance the benefits of trade negotiations against the damage of tariffs.
"If the competence of policymaking is questioned, markets will worry that economic damage will be lasting."
US treasury secretary Scott Bessent said over the weekend that over 50 countries have contacted Washington to start negotiations since the ’liberation day’ tariffs announcement.
8.39am: ’Seismic developments’
Investors are continuing to factor in a growing probability of a US recession into their pricing of stocks across most sectors.
The 10% blanket baseline tariff that US President Donald Trump announced came into effect on Saturday, with those tariffs set to escalate this week as Wednesday sees the higher ’reciprocal’ tariffs imposed on top.
On Thursday, China will start to impose the 34% retaliatory tariffs on US imports, which it announced on Friday.
Deutsche Bank (ETR:DBKGn) macro analyst Henry Allen notes that Trump showed "no sign of backing down" over the weekend.
“Forget markets for a second — we have all the advantages,” Trump told media on Air Force One yesterday, adding that, “I don’t want anything to go down, but sometimes you have to take medicine to fix something.”
Today, S&P 500 futures are currently down another 3.6%, which the Deutsche man notes would see the index fall into bear market territory today, down more than -20% from its closing peak in mid-February.
"Seismic developments", Allen call them, and looking to the week ahead, tariffs are "clearly set to dominate the agenda, but the big question is also how other countries might retaliate".
China’s retaliation is what led to the fresh selloff on Friday and if other countries retaliate, "then that also raises the risk that the US might raise tariffs even further, which is something they’ve warned about".
"So any signs of an escalatory spiral would pose an obvious downside risk over the coming days.
"On the other hand, if we begin to see signs of negotiations emerging, or an openness to the tariffs coming down over time, then that would start to open upside risks relative to the existing baseline."
8.25am: DAX falls 10%
The FTSE has recoiled slightly from its initial dive, now down a mere 5.4% compared to the 6%-plus in the initial minutes.
Over on the Continent, Germany’s DAX fell almost 10% initially and is down 9.6% now, with defence giant Rheinmetall (ETR:RHMG) down 21% as the biggest faller, though this is just knocking some of the froth off, and the stock is back to where it was just over a month ago.
There are no stocks in green on the Euro Stoxx 600 this morning and it’s one of those days where the ’risers’ list is led by those names that have fallen the least.
In London, Glencore (LON:GLEN) and Rolls are the worst affected.
On the FTSE 250, Ruffer Investment Company and Royal Mail (LON:IDSI) owner International Distribution Services PLC (LSE:IDS) are the only companies in green.
8.09am: Bloodbath indeed
The FTSE 100 has nosedived 494 points in opening trades, down another 6.1% to 7,560.
I had to retype that a few times as every time I looked at the price stream, it was another load of points lower.
Glencore PLC is down 12.4%, Rolls-Royce (LON:RR) Group PLC down 12.1% and Babcock International Group (LON:BAB) PLC down 10.6% as the worst of the fallers at this point.
Intermediate Capital, Antofagasta (LON:ANTO), Anglo American, St James (LON:SJP)’s Place also,.
Shell is down 7.5%, with NatWest (LON:NWG), Barclays (LON:BARC), IAG (LON:ICAG) next.
7.55am: ’Wherever we look, it’s a bloodbath’
Last week marked "the beginning of a historical market selloff", says market analyst Ipek Ozkardeskaya at Swissquote Bank, which accelerated into the weekend as China said that they would respond to the US tariffs with 34% tariff on American imports.
After Federal Reserve president Jerome Powell said that the tariff impact on the US economy could be higher than expected, adding that there is no rush to cut rates, "that was the last nail in the coffin" for markets, Ozkardeskaya added.
The US benchmark S&P 500 is down by more than 17% since its February peak, with accumulated losses since the February peak for the tech-heavy Nasdaq above 20%.
"Wherever we look this morning, it’s a bloodbath," Ozkardeskaya says, pointing to Asian markets, and European and US futures.
"Even gold is no longer willing to play," with the price of an ounce dropping back below $3,000 this morning.
"So, if you’re wondering where does the capital flow? It flows to into the government bonds – the US, the German, the Japanese, the Australian yields are all down on the growing expectation that the financial turmoil will soon bring the central banks back to cutting rates and to purchasing bonds to ensure stability.
"The US 2-year yield is down to 3.50% despite Powell’s message that there is no rush to cut rates. Investors know: if the selloff continues, the central banks will have no choice."
All this being said, Ozkardeskaya says she believes "we will be seeing incredible buying opportunities in a few weeks. Keep calm and don’t forget that markets always bounce back."
7.36am: Shell gives out some numbers
Shell PLC (LSE:LON:SHEL, NYSE:SHEL) has put out an update on its first quarter 2025 outlook ahead of the full quarterly results announcement scheduled for 2 May.
It’s got details on expected production, depreciation and other such things for analysts to refine their spreadsheets.
Production for the Integrated Gas division is expected to be slightly higher than last year, while oil production is projected at 1.79-1.89 million barrels of oil equivalent per day, versus 1,859 million last time.
With oil prices tumbling, this might be the best quarter for the company for a while.
7.24am: Oil prices down to 2021 levels
Crude oil and gas prices are continuing to fall sharply, now down to levels below when Russia invaded Ukraine in early 2022.
Brent crude is down 2.5% today to below $64 a barrel, the lowest since the middle of 2021, while US West Texas Intermediate is down 2.8% to $60.2.
UK natural gas prices are down to 83.3p per therm, the lowest since September.
This will be good news for inflation, but will hit shares in London’s Shell and BP (LON:BP), which will be contributing to the expected drop in the Footsie.
Shell has put out a trading statement this morning too, more on that in a second.
7.15am: Stock markets set for more turmoil
The FTSE 100 is projected to plunge another 150 points on Monday, taking it to close to a 12-month low, as Asian markets are cratering this morning.
Another 150 points off the London benchmark will combine with the 420 lost on Friday, which ended at 8,054.98, and would drag the index back into the 7,000s and the lowest since April last year.
Markets were reacting after the US unveiled blanket tariffs around the world, then on Friday China unveiled its response, including imposing a 34% tariff on US goods.
This morning, the Hang Seng is down 12.5%, the Shanghai Composite is down 8.7%, Japan’s Nikkei is down 6.9% and India’s Sensex is down 3.8%.
US futures are also pointing to more deep losses, with those for the S&P 500 indicating a 3.4% drop, Nasdaq 100 futures falling 4.15% and Dow Jones futures losing 2.45%, which was after last week saw all three indices plummet between 5.5% and 6%.
Monday 7 April, announcements due:
Interims: Applied Nutrition
US earnings: Levi Strauss (NYSE:LEVI) & Co
Economic announcements: Halifax House Price Index (UK), Balance of Trade (GER), Industrial Production (GER), Retail Sales (EU)