The sharemarket recorded its biggest loss in eight months on Friday after the US administration doled out wide-reaching and punitive tariffs, drastically increasing the risk of a global recession.

Investors erased $56.6 billion from the ASX 200 after equities around the world tanked. The S&P/ASX 200 Index dropped 2.4 per cent, or by 191.9 points, to 7667.8 points at the market close. Over one week it lost 3.9 per cent – the largest such fall since 2022.

The bout of heavy selling sent the benchmark gauge tumbling back into correction territory for the second time this year. Ten of the 11 sectors were in the red, with energy stocks plummeting 8 per cent.

Little spared

The market rout, which erased trillions of dollars from Wall Street overnight, follows US President Donald Trump’s plan to slap all countries with a 10 per cent baseline tariff, which takes effect on Saturday, and more punitive measures on around 60 nations – including a 34 per cent levy on China.

Little was spared across financial markets as major institutions warned the global economy was at high risk of a recession. In Australia, bond traders are pricing in four interest rate cuts from the Reserve Bank, up from two before the tariffs.

“Trump’s opening salvo points to higher tariffs than we were expecting,” said Johanna Kyrklund, group chief investment officer at Schroders. “This leads us to reduce our weight in equities, and we see value in government bonds as a hedge against the risk of recession.”

US equity futures point to more selling after about $US2 trillion ($3.1 trillion) was erased from the S&P 500 on Thursday. All eyes will be on key US jobs data overnight to help gauge the strength of the US economy.

In Australia, investors fled banks and technology stocks. Data centre play NextDC dropped 6.4 per cent to $10.65 and Life360 sank 9.8 per cent to $18.01. The big banks all extended losses, with Commonwealth Bank retreating 1.5 per cent to $154 and Macquarie tumbling 9 per cent to $174.

Stocks in focus

Energy stocks tanked after OPEC+ shocked the market with a decision to lift supply in May three times. Brent crude plummeted more than 6 per cent in one session. Index bellwether Woodside sank 9.1 per cent to $20.4 and Karoon Energy posted the largest loss on the bourse, diving 12.2 per cent to $1.37.

Companies most exposed to US tariffs attempted to reassure investors over the impact on their cost base and supply chains. Car accessories maker Amotiv plummeted 16.7 per cent to $7.32 despite warning tariffs would not have a material impact. Meanwhile, Ansell, which manufactures medical equipment, lifted 3 per cent to $30.22 after it promised to “fully offset” tariffs through pricing.