Asian Markets Tumble After Trump's Tariffs Announcement; Investors Watch US. Jobs Report Closely

Investors felt the jitters as Asian markets dropped on Friday after U.S. President Donald Trump signed an executive order imposing tariffs ranging between 10% and 41% on imports from countries such as India, Taiwan, Thailand, South Korea, and Turkey.

South Korea's KOSPI dropped 3%, Taiwan's TWII slipped 0.9% to its lowest in two months, Japan's Nikkei was off 0.4%, and MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.7%, also marking a 1.8% decline for the week. Chinese blue chips were little changed, and Hong Kong's Hang Seng inched higher by 0.2%.

The tremors were also felt in European markets, where futures for EUROSTOXX 50 fell 0.2%. Futures for the Nasdaq and the S&P 500 fell 0.2% in reaction to Amazon's earnings, which fell short of expectations and caused its shares to drop 6.6% in extended trading. Apple provided a little boost to sentiment, up 2.4% on strong revenue guidance.

Tariffs Create Uncertainty Ahead of Fed Decision

The new tariffs range from 25% on Indian goods and 20% on Taiwanese exports to 19% on Thai imports. The new tariff rate for South Korea is 15% down from the earlier announced 25%. Canadian goods not covered under the USMCA are subject to a new 35% tariff rate, up from 25%. Mexico was relieved as it got a 90-day break to negotiate further.

Markets reacted with caution. Wall Street gave up early gains on Thursday. The Dow dropped 0.75%, the S&P 500 ended down more than 0.3%, and the Nasdaq closed slightly in the red. Fresh U.S. inflation data suggested that prices were rising, in part because of tariffs. Fed fund futures now show just a 39% probability of a rate cut in September, down from 65% before the Fed stuck to its announced rates on Wednesday.

Dollar Gains, Bond Yields Steady Amid Caution

The dollar advanced as traders trimmed rate-cut wagers. The dollar's index rose to 100.1, its highest in two months, with a 2.5% weekly gain, the most since 2022. The yen weakened 0.8% to 150.7 per dollar after the Bank of Japan kept rates on hold and sounded a cautious note. The Canadian dollar was steady even as tariffs increased. The yield on the 10-year United States Treasury note edged up to 4.374%.

Commodities Mixed as Oil Holds Steady, Gold Loses Ground

Oil prices remained flat after a 1% decline on Wednesday. U.S. crude rose 0.1% to $69.36 a barrel, and Brent gained 0.2% to $71.84. On the spot market, gold was down slightly, to $3,286 an ounce, as investors balanced a flood of safe-haven demand against rising yields and a stronger dollar.