More than $20b wiped off ASX as tariff terrors spook markets

“I don’t think the stock market is a high priority of the White House administration at this point in time and the fact that we’ve seen these tariffs come just quicker and more broadly than anticipated, I just don’t think (Trump) is going to walk them back.”

The fresh bout of uncertainty in global markets came after a weekend that saw Trump himself suggest that the American economy is set to slow after he sidestepped a question in an interview on Sunday. Asked on Fox News’ Sunday Morning Futures program whether he is expecting a recession, he said: “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”

The change in language from the campaign trail – when he promised tariffs on Day One that would pay for tax cuts without disrupting the growth – has sparked a frenzied repricing of risk assets and also triggered an investor flight to traditionally safe haven assets such as gold.

“Sharemarkets have been rattled, triggering a flight to safety. Short-term money has flowed into US Treasuries, Gold, JPY, and CHF, while growth-linked currencies (AUD, NZD, CAD) have sold off,” said Kurt Mayer, the head of markets at CMC Australia and New Zealand.

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The US will on Wednesday impose 25 per cent duties on all steel and aluminium imports, including from allies such as Australia and Japan, which have failed to win carve-outs. Trump’s plans for reciprocal tariffs on all nations that impose duties on the US are set to take effect from April 2.

On Tuesday on the ASX, the big four banks slumped in early trade, but recovered some ground at the close. Commonwealth Bank – the nation’s biggest lender and the biggest stock on the ASX – was down 0.8 per cent after slumping more than 2 per cent in early trade, while Westpac (up 1 per cent), ANZ (up 1 per cent), and NAB (up 0.1 per cent) all recorded gains.

Meanwhile, consumer discretionary retailers suffered – Bunnings, Kmart and Officeworks owner Wesfarmers was down 1.3 per cent and electronics retailer JB Hi-Fi lost 2.5 per cent, while consumer staples such as the big supermarkets fared better – Coles’ share price rose 0.6 per cent.

The Australian dollar traded at US62.66¢ after its fall overnight.

The mining heavyweights were mixed, with the world’s biggest and lowest-cost miner BHP and iron ore rival Rio Tinto up 1.2 and 0.5 per cent respectively, while Fortescue extended its losses, down 1 per cent.

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The market sell-down continued even after data showed Australia’s consumer confidence picked up in March as inflation pressures eased, which had led the Reserve Bank to cut interest rates for the first time in four years last month. Sentiment jumped 4 per cent to 95.9 points – the highest level in three years according to figures from a Westpac survey released Tuesday morning.

Tech stocks led the market’s losses, as embattled software giant WiseTech Global (down 1.9 per cent), Xero (down 5.1 per cent), TechnologyOne (down 5.7 per cent), and NextDC (down 1.8 per cent) all recorded sharp falls.

The tech plunge mirrors the big tech sell-off on Wall Street amid a rotation into defensive shares, which sent the S&P 500 down 2.7 per cent and had the tech-heavy Nasdaq 100 plummeting 4 per cent, wiping out more than $US1 trillion ($1.6 trillion) in its worst session in two and a half years.

In the US, Tesla tumbled 15.4 per cent on Monday, widening its loss this year to 41 per cent. AI chip giant Nvidia lost 5.1 per cent and has erased more than $US1 trillion in market value in two months. Bloomberg’s index of the Magnificent Seven tech stocks – which also includes Google’s parent Alphabet, Amazon, Apple, Meta and Microsoft — tumbled 5.4 per cent and is now down more than 15 per cent in 2025.

‘We’ve gone from animal spirits to what are the odds of a recession.This is a headline-driven market; one that could change in an hour. Sit tight. Buckle up.’

Gina Bolvin, president of Bolvin Wealth Management Group

The Dow Jones Industrial Average lost 2.1 per cent. Wall Street’s closely watched volatility gauge – the VIX – hit the highest this year. US Treasury yields slid on bets that an economic slowdown would force the Federal Reserve to slash interest rates. Bitcoin slipped below $US80,000 ($128,000).

“Sell your winners, embrace the bear case and duck and cover,” said Michael Bailey, director of research at Fulton Breakefield Broenniman.

“We’ve gone from animal spirits to ‘What are the odds of a recession?’,” said Gina Bolvin, president of Bolvin Wealth Management Group. “This is a headline-driven market; one that could change in an hour. Sit tight. Buckle up. We finally have the correction we were waiting for.”

Demand for recession havens have also boosted sovereign bonds. The yield on 10-year US Treasuries slid nine basis points to 4.21 per cent. West Texas Intermediate dipped to trade below $US66 a barrel, down more than 15 per cent from its mid-January peak.

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A chorus of Wall Street strategists is warning about higher stock volatility, sounding the alarm on economic growth worries.

“There are always multiple forces at work in the market, but right now, almost all of them are taking a back seat to tariffs,” said Chris Larkin at E*Trade from Morgan Stanley. “Until there’s more clarity on trade policy, traders and investors should anticipate continued volatility.”

From rookie retail traders to hedge fund pros, no one knows what the eventual cost of Trump’s sweeping policies will be. His pro-growth plans were tax cuts, deregulation and energy dominance. Tariffs were supposed to bring manufacturing back to the US and create jobs. But so far, there’s little evidence of that.

With AAP, Bloomberg and staff writers

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