Stocks seesawed overnight as markets were left reeling from a fresh escalation in the US-China trade war and the ongoing fallout from Donald Trump's blizzard of tariffs.
China's foreign ministry vowed on Friday, local time, that Beijing would "fight to the end", before hiking tariffs on US goods to 125 per cent and deepening the schism between the world's two largest economies.
Meanwhile, the US administration signalled it would stick to its guns on the 145 per cent import tax imposed on Chinese goods, when Mr Trump posted on Truth Social that America was "doing really well on our tariff policy".
The stand-off, coupled with baseline tariffs still in place on America's other trading partners, has prompted another wave of chaos in global markets.
Wall Street opened in the red but quickly rose, while the American dollar tumbled and gold hit another record high.
The US dollar pared back some losses against major currencies after plunging to the lowest level against the euro in more than three years as investors fled what is typically considered a key safe-haven currency.
The benchmark S&P 500, the Dow Jones and the Nasdaq were all trading lower, although they were set to end the volatile week higher.
"Part of the dollar weakness in the past few weeks has been linked to worries over a recession or the Fed cutting rates, but it's kind of gone beyond that," said Win Thin, global head of markets strategy at Brown Brothers Harriman in New York.
"It's more really of loss of confidence and credibility in the dollar and then in US policy-making."
He added: "Typically in risk-off episodes, dollar should gain as a safe haven but it's really been the yen and Swiss franc that has been picking that up and the dollar has been under pressure."
European markets also wobbled when China announced its new tariff rate.
Frankfurt fell and Paris was flat in afternoon deals, while London rose as data showed the UK economy grew far more than expected in February.
"The main driver of the renewed market pressure was an increased focus on the US-China escalation," said Jim Reid, managing director at Deutsche Bank.
"Neither the US nor China are showing signs of backing down, with President Trump expressing confidence in his tariff plans," Mr Reid added.
US bonds were also under pressure amid speculation that China was offloading some of its vast holdings in retaliation for Mr Trump's measures.
With treasuries being sold off, sending their yields higher and making US debt more expensive, there is a fear of a bigger exodus from American assets down the line.
The weaker dollar and the rush for safety sent gold to a fresh record high above $US3,220 an ounce.
Oil prices rose slightly after huge falls on Thursday.
"There remains considerable uncertainty around the impact of tariffs on economies and company earnings, and that could keep markets volatile for some time," said Russ Mould, investment director at AJ Bell.
It followed the Australian share market ending the day down yesterday. The ASX 200 lost 0.28 per cent over the week and had seen huge losses followed by historic gains when the US president hit pause on his tariff plan.
In Asia, the Tokyo stock market shed 3 per cent — a day after surging more than 9 per cent — while Sydney, Seoul, Singapore, Wellington and Bangkok were also in the red.
However, Hong Kong and Shanghai rose as traders focused on possible Chinese stimulus measures.
There were gains in Taipei and Ho Chi Minh City stocks as the leaders of Taiwan and Vietnam said they would hold talks with Mr Trump.
China's last move
On Friday, Spanish Prime Minister Pedro Sanchez visited Beijing for a meeting with Xi Jinping.
In an official summary of the meeting, the Chinese president was said to have remarked: "There will be no winners in a tariff war, and going against the world will isolate oneself."
He also invited the EU to work more closely with China to resist what he called US "bullying".
A statement by the Chinese foreign ministry also suggested the 125 per cent rate could be the final rise in the US and China's tit-for-tat battle, as "at the current tariff level, there is no market acceptance for US goods exported to China".
"If the US continues to impose tariffs on Chinese goods exported to the US, China will ignore it," it added.
Meanwhile, Mr Trump showed no sign of backing down, posting on Truth Social: "We are doing really well on our tariff policy. Very exciting for America, and the World!!! It is moving along quickly."
AFP/Reuters
