Asian Stocks to Dip as Wall Street Sentiment Sours: Markets Wrap

(Bloomberg) — European stocks followed Asia lower as US President Donald Trump’s shifting approach to trade tariffs whipped up market uncertainty and dented confidence in the economic outlook. Bitcoin slumped as details of a US strategic reserve disappointed.

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Europe’s Stoxx 600 benchmark fell 0.7%, while contracts for the S&P 500 fluctuated after declines on Wall Street. Shares sank from Sydney to Hong Kong with Japan’s Nikkei-225 Stock Average tumbling more than 2%. Treasuries ticked higher, while an index of the dollar fell for a fifth session, its longest losing streak in almost a year.

Geopolitical uncertainty and conflicting signals from the US about tariffs have whipsawed financial markets, putting the S&P 500 on track for its worst week since September. Underscoring the growing risk aversion, US stocks failed to stage a rebound even after Trump delayed levies on Mexican and Canadian goods covered by the North American trade deal.

“Confusion reigns around the Trump Administration policy agenda,” said Chris Weston, head of research for Pepperstone Group. “While there are few signs of panic, funds and fast-money accounts cut equity risk.”

Investors get a snapshot of the labor market later Friday with US nonfarm payrolls data as concern about tariffs shifts from their potential impact on inflation to the damage they may cause the economy. Federal Reserve Chair Jerome Powell is slated to speak at a monetary policy forum in the afternoon.

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In Europe, rate cuts and Germany’s historic plan to ramp up defense spending have boosted the market, sending the DAX up about 3% in the week. At the same time, the prospect of more debt issuance hoisted yields on German bonds by the most since 1990. On Friday bunds opened higher, with front-end yields falling two basis points.

Separately, Bitcoin sank as much as 5.7% and four other digital tokens that had previously been highlighted by Trump fell at least 3%, as a potential lack of new buying weighed on the market.

The executive order signed by Trump indicated that the government wouldn’t use taxpayer money to fund a strategic reserve of the largest digital asset. Instead, the reserve would be capitalized with Bitcoin already owned by the federal government.