WORLD NEWS FOR MONTENEGRO DIASPORA
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SOURCE: REUTERS- AUTHOR:M.J. GDNUS
The respite was too good to last, and sure enough, it didn't. World stocks fell into a downward spiral on Wednesday led by tech losses after Washington said it is putting new curbs on AI chip exports to China, marking an escalation in the global trade war.
The Trump administration's latest broadside sparked huge demand for safe-haven assets like gold, the Swiss franc and U.S. Treasuries, even though Fed Chair Jerome Powell signalled he is in no rush to cut interest rates.
If U.S. Big Tech had acquired a safe-haven status in the eyes of some investors in recent years, it is disappearing fast. More on that and more below, but first, a round-up of the day's main market moves. I'd love to hear from you, so please reach out to me with comments at jamie.mcgeever@thomsonreuters.com, opens new tab. You can also follow me at @ReutersJamie, opens new tab and @reutersjamie.bsky.social, opens new tab.
If you have more time to read today, here are a few articles I recommend to help you make sense of what happened in markets.
In a fog of uncertainty, Fed policy storm could be approaching
WTO slashes 2025 trade growth forecast, warns of deeper slump
US-China decoupling is crossing a Rubicon
EXCLUSIVE-Nvidia kept some China customers in the dark about new US chip clampdown, sources say
Record gold crowded by one mega player: Mike Dolan
Today's Key Market Moves
Wall Street falls, dragged lower by tech - Nasdaq -3%, S&P 500 -2.2%, Dow -1.7%. The Philadelphia semiconductor index and the Roundhouse 'Magnificent 7' ETF both fall 4%.
Nvidia falls nearly 7% - at one stage it was down 10% - wiping some $175 billion off its market cap. AMD shares fall 7.4%.
Chinese tech shares listed in Hong Kong fall 3.7%.
Safe-haven gold surges 3.4% to a new high of $3,342/oz, and the Swiss franc is the biggest gainer in the G10 FX space, rallying 1% against the dollar.
The dollar index falls 0.9%, back down to last week's three-year low.
The Canadian dollar underperforms, gaining only 0.6% even though the Bank of Canada paused its easing cycle and held rates steady at 2.75% in what traders and economists had said was a close call.
Nikkei and DAX futures point to falls of around 0.2% and 0.5%, respectively, at the open in Japan and Germany on Thursday.
Oil rises nearly 2% on supply concerns after the U.S. issues new sanctions targeting Chinese importers of Iranian oil.
When the chips are down, really down
After a few days of relative calm, investors buckled up on Wednesday as the Trump administration's latest trade war salvo sent world markets reeling again, with the big loser being Big Tech.
Morgan Stanley's economists estimate tariffs will knock 90 basis points off growth relative to their original forecast, which will only be partially offset by 60 bps of additional stimulus.
Although U.S. growth is slowing, Fed Chair Jerome Powell signaled on Wednesday the central bank will wait for "greater clarity" before deciding its next move on rates. He also said markets have been orderly and downplayed the risk of Fed intervention.
Massive selling of long-dated Treasuries last week raised fears that part of the bond market wasn't functioning smoothly. There was no sign of that on Wednesday, however, as bonds' 'safe haven' qualities pushed yields down as much as 5 basis points at the short end.
In Europe, eyes will turn to Frankfurt where the European Central Bank on Thursday will announce its latest policy decision and ECB President Christine Lagarde will offer her outlook. Market pricing suggests a 25 basis point cut is all but certain, with at least another two coming later this year.
