Wall Street set to open lower after China claps back with higher tariffs

• US futures fell sharply after President Donald Trump's new tariffs kicked off and China retaliated.
• Treasurys sold off as investors dashed for the safety of cash.
• Trump's new tariffs have sparked global market volatility and economic concerns.

China's decision to impose 84% tariffs on US imports sent US futures and European stock markets tumbling again on Wednesday.

The announcement at about 7 a.m. ET sent futures for all three indexes down, while Europe's Stoxx 600 index sank about 4%.

Asian shares and Treasurys sold off in a volatile trading day after President Donald Trump's sweeping tariffs took effect.

China's stock markets were relatively stable, by contrast, after the central bank and state-owned firms pledged support.

Here's how US indexes looked in premarket trading:

• S&P 500 futures: down 1.2% at 4,957 at 7:45 a.m. ET
• Dow Jones futures: down 1.5% at 37,305

Nasdaq 100 futures: down 0.8% at 17,097

Here's where major Asia indexes ended the trading day:

• Japan's Nikkei 225: down 3.9%
• South Korea's Kospi: down 1.7%
• Australia's ASX 200: down 1.8%
• Hang Seng Index: down 0.7%.
• China's CSI 300: down 1%

Oil futures tanked to four-year lows:

• West Texas Intermediate crude futures: 5.5% lower at $56.30 a barrel at 7:45 a.m. ET
• Brent futures: 5.8% lower at $59.13 a barrel

Bond rout

Treasurys sold off as investors dashed for the safety of cash. There are also questions about the role of the dollar amid the US's new tariff regime.

US Treasury markets were experiencing an "incredibly aggressive selloff" that added "to the evidence that they're losing their traditional haven status," wrote analysts at Deutsche Bank in a Wednesday note.

The yield on 10-year Treasurys rose 12 basis points to 4.386% after rising above 4.5% overnight.

The bond rout comes on the back of a weak auction for three-year Treasurys on Tuesday.

"Treasuries were not trading great into the auction, but the poor outcome gave them another kick. The important thing about the 3yr is it's a line that global central banks tend to lap up," wrote analysts at ING in a Tuesday note.

"This seemingly 'sell America' trade, is one that's now dominating the rising recession risk theme that typically would have pushed yields down," the ING analysts wrote.

The US dollar — typically a safe haven as well — fell against a basket of major currencies, including the Japanese yen. Spot gold was up.

'No asset class has been spared'

The losses on Wednesday follow a wild overnight trading session on Wall Street, during which stocks opened up only to erase big gains and ended lower.

The wild swings in the markets point to persistent volatility after President Donald Trump shook up the world's global trading system with new sweeping tariffs.

"There's no sign yet that the market is managing to successfully find a bottom, and it feels like no asset class has been spared as investors continue to price in a growing probability of a US recession," wrote Deutsche Bank's analysts.

Investors continue to worry over the impact of Trump's tariffs, which are expected to fuel inflation and slow investment in the US.

"Historically, the effects of a slowing US economy have spilled over to the rest of the world, weighing on global growth and strengthening the dollar against most currencies, with the exception of traditional havens such as the Japanese yen and Swiss franc," wrote strategists at Lombard Odier, a Swiss private bank, in a Tuesday note.