Global stocks slide again after Trump tariff rout

Global stocks have slid for a second day on Friday after US President Donald Trump's sweeping tariff plans wiped $US2.4 trillion off Wall Street equities, sending investors running for cover in government bonds as recession fears gripped markets.

Banking stocks cratered as investors fretted about growth and priced in far more central bank rate cuts, with benchmark 10-year US Treasury yields sliding to their lowest since October after Trump slapped a 10 per cent tariff on most US imports and much higher levies on dozens of countries.

Europe's STOXX 600 slid 1.1 per cent in early trading on Friday after shedding 2.6 per cent on Thursday.

Japan's Nikkei 225 slumped 2.8 per cent for a second session running.

Futures for the US S&P 500 fell 0.4 per cent on Friday, pointing to a more contained drop at the open than on Thursday, when the cash index plunged 4.8 per cent in its biggest one-day fall since the COVID-19 crisis in 2020.

Nasdaq futures were down 0.3 per cent after the index dropped 5.4 per cent on Thursday.

After years of huge inflows into US markets and stellar performance by the American economy, investors are suddenly fretting about a reversal in growth

The risk of a US and global recession this year has risen to 60 per cent from 40 per cent earlier after Trump's tariff announcements, JP Morgan said.

Traders on Friday were pricing in more than 100 basis points of Federal Reserve rate cuts this year, up from around 75 basis points on Wednesday, and increased their bets on Bank of England and European Central Bank reductions too.

Lower interest rates - which dent lenders' margins - and worries about growth battered banking stocks, with the STOXX 600 banking index shedding 4.2 per cent in early trading.

HSBC shares dropped 3.2 per cent, UBS fell 2.5 per cent and BNP Paribas slid 3.4 per cent.

That followed an eight per cent rout for Japanese banks overnight and a sharp sell-off of Wall Street lenders on Thursday.

Citigroup dropped more than 12 per cent, Bank of America sank 11 per cent and a host of other major lenders suffered similar falls.

The most obvious sign of nerves about the health of the US economy and markets was a 1.9 per cent drop in the dollar index on Thursday, the biggest fall since November 2022.

The dollar found a footing on Friday, however, with the euro down 0.5 per cent after rallying 1.9 per cent on Thursday, while the pound fell 0.7 per cent.

Japan's yen, a traditional safe haven, held broadly steady after rallying about two per cent the previous day.

The Swiss franc, another safe haven, perked up about 0.6 per cent.

"The thing that might help markets a little bit is that we get data that suggests that, actually, we are going to get one per cent-plus growth in the US in the last quarter," said Michael Metcalfe, head of macro strategy at State Street Global Markets.

Metcalfe pointed to US non-farm payrolls data, due later on Friday, as one key data point and retail sales figures in two weeks as another.

As investors continued to hunt for safety, 10-year US government bond, or Treasury, yields fell 11 basis points to 3.951 per cent, after sliding 14 basis points on Thursday. Yields move inversely to prices.

Japanese 10-year government bond yields were set for their biggest weekly fall - at 37 basis points - since 1990 and last traded at 1.175 per cent.