‘Already in a recession’: US shares swing on Trump tariffs

The ASX 200 has bounced back after suffering its biggest one-day fall since the start of the Covid pandemic.

Australia’s sharemarket jumped as well as the Australian dollar following a volatile session in the US where the index swung by as much as 8 per cent.

The ASX 200 lifted by 57.7 points, or 0.8 per cent at the open, to recover to 7401.7.

The Aussie dollar has swung wildly overnight, getting to a high point of 61.2 US cents on false news of a pause in US tariffs. It then subsequently sank back down to its 60 US cent level.

The ASX has jumped at the start of trading. Picture: NewsWire / Max Mason-Hubers

The bounce follows Australia’s sharemarket being been smashed for a second day running after the worst day on Wall Street since the Covid pandemic off the back of the global tariffs announced by US President Donald Trump.

“The rebound was also supported by a recovery in S&P 500 futures, a sharp move lower in bond yields, as the market speculated on a super-sized 50bp RBA rate cut in May, and reports that Chinese policymakers have been discussing stimulus measures to counter the impact of US tariffs,” IG market analyst Tony Sycamore said.

Global markets swung sharply in the early hours of Tuesday as the fallout from Mr Trump’s tariff policy continued to wreak havoc.

Mr Trump announced a 34 per cent tariff on China last week that he claimed evened up trade between the two countries.

It rebounded despite fears of a US recession. Picture NewsWire / Gaye Gerard

In response, China announced its own 34 per cent tariff on US goods.

In a tit-for-tat response, Mr Trump threatened an additional 50 per cent tariff on Beijing if it implemented any tariffs on the US.

Discussing the impact of tariffs on the US, Blackrock chief executive Larry Fink said “most CEOs I talk to would say we (the US) are probably in a recession right now”.

He said the falls in global stocks were now “more of a buying opportunity than a selling opportunity” in the long run.

”That doesn’t mean we can’t fall another 20 per cent from here too,” he said.

”The reality is 62 per cent of Americans now invest in equities – the market impact is impacting Main Street,” he said.

The turmoil “is going to freeze more and more consumption, I think we’re going to start seeing that really quickly”.

Originally published as ‘Already in a recession’: US shares swing on Trump tariffs