DAX crashes: Trump and China force stock exchanges worldwide

Not only the DAX is deep in the minus. On the stock exchanges, investors flee in droves from stocks for fear of the consequences of a global trade war. The wave of sales increased on Friday after the announcement of Chinese retaliation tariffs in response to US President Donald Trump. “The next trade war started today at the latest,” said IG Market strategist Christian Henke.

Around the globe, the investors switched to the “risk-off” mode on Friday and increased, for example, for government bonds, while onwards, the amount of oil prices at times brought more than nine percent to crash.

The second day in a row was crashed into the stock markets in Europe: The Dax plunged up to 5.9 percent to 20,437 points and thus even more violent than in February 2022 when Russia marched into Ukraine.

The EuroStoxx50 gave up to 5.4 percent. Bank shares in particular came under pressure. The European volatility index, which is considered an fear of the stock exchanges, climbed 11.5 points – the largest daily increase in 3.5 years. In the afternoon, a renewed sale was emerging on Wall Street: the futures on the US Leit indices were around three percent weaker.

China announced a number of countermeasures against the tariffs imposed by Trump, including additional tariffs of 34 percent to all US goods and export restrictions for certain rare earths. “China strikes back with an aggressive reaction … This is significant and will probably not be over,” said Stephane Ekolo, market strategist in tradition in London.

From the experts’ perspective, the mutual tariffs mark a drastic escalation. They threaten to drive up prices, to disturb supply chains and to press the profit margins of the companies. In the course of this, the DAX headed for a weekly minus of more than seven percent. Technically, strategists exclaimed the correction mode, since the leading index from its all -time high from mid -March is now more than ten percent away.

Trump announced on Wednesday that he would raise a basic customs set of ten percent on all imports to the USA and higher tariffs to dozens of other countries. 20 percent should apply to the EU, 34 percent are planned for China.

It was particularly hard on the stock exchanges of the economic -sensitive banking sector. The European banking index dropped by up to 10.5 percent and was on its way to its worst day since March 2020. In the DAX, Deutsche Bank’s shares lost up to 12.1 percent to 18.30 euros. They have been heading for their greatest loss of day since June 2022. Traders now assume that the probability of reducing interest rate by the ECB is 90 percent in the course of this month. In addition, two further interest reductions are generally expected before the end of 2025.

The luxury sector, whose sales depends to a high degree of China, also stalled: the French company LVMH lost 2.8 percent, while the shares of Gucci-owner Kering, Hermes and Richemont gave up between 3.4 and 7.5 percent.

After China’s counterattack in the customs dispute with the USA, oil prices were increasingly slipping. North Sea oil Brent were up to 8.5 percent in the red of $ 64.14 per barrel. The price of US oil WTI crashed by 9.2 percent to $ 60.81 per barrel. On a weekly perspective, the prices headed for a minus of more than twelve percent each.

“The trade war has escalated, the fear of recession increases and consequently the growth of oil demand will suffer a considerable blow,” said Tamas Varga, analyst at PVM. Shares of oil and gas companies went on a downfield. The European industry index fell by 6.3 percent. The price pressure was reinforced by the recent decision by the Opec+Group to significantly increase its production in May.

The industrial metal copper also caused the economy. The price fell by six percent to $ 8802 per ton. “The view of a global trade war and weaker economic growth should first maintain downward pressure on the raw material markets,” predicted the analysts of the Anz-Bank.

In the search for low -risk investment options, investors again increased with government bonds. The courses of the ten -year -old German bonds rose, in return the return fell to 2.500 percent after 2.641 percent in the final business of Thursday.