(qlmbusinessnews.com . Sun 12th Oct, 2025) London, UK —
US-China Trade Tensions Intensify Market Volatility: Trump’s Tariff Threats Shake Global Stocks
Yesterday witnessed global stock markets taking a sharp downturn, spurred by warnings that an artificial intelligence-induced boom could be on the brink of collapse.
The FTSE 100 index in the UK, after achieving a record peak of 9548 on Wednesday, experienced a modest decline of 0.4 per cent on Thursday, followed by a steeper fall of 0.9 per cent on Friday, closing the week at 9427.47. This marked the most significant drop since mid-September, influenced by cautions from the Bank of England and the International Monetary Fund (IMF) regarding a potential significant adjustment in vibrant stock markets.
Mirroring the downturn in London, the American markets also faced declines. Early trading saw the S&P 500 lower by 2.4 per cent, the Nasdaq decreased by 3.1 per cent, and the Dow Jones Industrial Average fell by 1.7 per cent.
These market convulsions were further exacerbated by escalating tensions in the US-China trade relationship, as President Donald Trump threatened a significant increase in tariffs on Chinese goods. Trump expressed he saw “no reason” for a scheduled meeting with Chinese President Xi Jinping, citing China's “hostile” export controls on rare-earth minerals, which cast doubt on negotiations planned to occur in South Korea later in the month.
Mike Brown, an analyst at Pepperstone, described Trump's move as unexpected. Fears of a looming crash intensified after a week of record highs for gold and stock markets, despite numerous warnings about an overinflated bubble powered by enthusiasm for AI. According to Steve Sosnick, chief market analyst at Interactive Brokers, Trump's remarks did little to mitigate market concerns.
The sentiment was echoed by the IMF in the lead-up to its annual meetings in Washington, issuing a grave forecast for the global economy. With the World Uncertainty Index at an all-time high, IMF Managing Director Kristalina Georgieva advised to “buckle up” for a period of prolonged uncertainty. The Bank of England also issued a report highlighting increased risks of a sharp market correction.
Adding to the apprehension, Jamie Dimon, CEO of JP Morgan, indicated concerns over a severe market correction possibly occurring in the next six months, stating his heightened level of worry compared to others. Amid these warnings and geopolitical strains, global markets brace for potential turbulence ahead.
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