Stock market today: Global shares slip as worries grow about Trump's tariffs

Global shares mostly fell in trading on Monday, 3 February as worries grow about US President Donald Trump imposing tariffs on key trading partners.

France's CAC 40 slipped 1.6 per cent in early trading to 7,826.14, while Germany's DAX dropped 1.5 per cent to 21,395.31. Britain's FTSE 100 fell 1.3 per cent to 8,565.00. US shares were set to drift lower with Dow futures down 1.2 per cent at 44,152.00. S&P 500 futures slipped 1.5 per cent to 5,977.25.

Japan's benchmark Nikkei 225 lost 2.7 per cent to finish at 38,520.09. Australia's SP/ASX 200 declined 1.8 per cent to 8,379.40. South Korea's Kospi dropped 2.5 per cent to 2,453.95. Hong Kong's Hang Seng dipped less than 0.1 per cent to 20,217.26, while trading was closed in Shanghai for a holiday.

Analysts said Asian markets were bracing for volatility set off by a possible trade war escalation.

“The implications for trade restrictions could result in reduced global trade flows, supply chain shifts which could mean higher costs for businesses, and higher inflation,” said Yeap Jun Rong, market strategist at IG.

The share price of SoftBank Group Corp rose 0.5 per cent after it announced at an event with OpenAI in Tokyo that they were setting up SB OpenAI Japan, in which each would own a 50 per cent share, to offer artificial intelligence services to companies.

Investors have been jolted by a report from a Chinese upstart, DeepSeek about developing a cheaper large language model that can complete globally. The disruption raised questions about whether all the investment expected for AI chips is really needed, sending some technology shares tumbling.

Shares of technology companies listed in Hong Kong seemed to hold up despite the threat of Trump's tariffs, partly because DeepSeek highlights the strength of the nation's technology sector.

Trump's 25 per cent tariffs on most imports from Canada and Mexico and 10 per cent tariffs on goods from China are to take effect Tuesday. His administration has not said what specific improvements would need to be seen in stopping illegal immigration and the smuggling of fentanyl to merit the removal of the tariffs.

Canada and Mexico ordered retaliatory tariffs on American goods. Canada's will take effect Tuesday on a range of products, while Canada didn't give immediate details.

Also last week, the US Federal Reserve left its benchmark interest rate unchanged, taking a more cautious view on how policies under Trump might impact inflation and the broader economy.

In energy trading, benchmark US crude jumped $1.76 to $74.29 a barrel. Brent crude, the international standard, gained $1.04 to $76.71 a barrel.

In currency trading, the US dollar edged up to 155.41 Japanese yen from 155.18 yen. The euro cost $1.0250, down from $1.0363.