The Australian share market fell to its biggest loss in eight months on Friday in reaction to a sickening drop on world share markets after investors reacted to US President Donald Trump’s range of heavy global tariffs.

More than $57 billion – close to $70 billion over two days – was knocked off the value of Australian shares on Friday after the market dived more than 2.4% as the full impact of the far-reaching tariffs radically increased the risk of a global recession.

Market falls into a correction again

By the close of trade the ASX 200 index had fallen 2.4% or 191.9 points, to 7667.8 points – the biggest fall since 5 August 2025.

The drop meant the Australian market had dipped back into a correction – where shares have fallen more than 10% from the peak – for the second time this year.

The damage was widespread with ten of the 11 sectors in the red, led down by energy stocks which fell by a mammoth 8% as global oil prices plummeted.

Wall Street rout erases $3.1 trillion

The fall followed on from a rout on Wall Street which erased around $3.1 trillion of value after Donald Trump decided to slap all countries with a 10% baseline tariff from this Saturday, with much more punitive measures on many other nations including a punishing 34% levy for China and even worse for several other low wage Asian suppliers.

Analysts said the tariffs, which were based on a very simplistic and inaccurate arithmetic formula derived from the balance of trade with the relevant country, were much higher than expected and greatly increased the risk of a recession in the US and in other countries.

Traders factor in four interest rate cuts

The tariff announcement saw Australian bond traders start pricing in four interest rate cuts by Australia’s Reserve Bank, up strongly from the two predicted before the announcement.

Energy stocks in particular were hit hard after OPEC+ shocked the market with a decision to lift supply in May threefold.

That sent down Brent crude by more than 6% in one session and led to heavy losses here in Australian energy stocks, with sector leader Woodside (ASX: WDS) falling 9.1% to $20.43.

Other energy stocks followed, with shares in Karoon Energy (ASX: KAR) one of the worst hit, down a whopping 12.2% to $1.37 while Santos (ASX: STO) shares also fell 9.4%.

Energy and tech hit hardest

Technology shares were also slapped down hard, with data centre play NextDC (ASX: NXT) down 6.4% to $10.65, WiseTech (ASX: WTC) shares down by 8.5% to $74.83 and Life360 (ASX: 360) down 9.8% to $18.01.

Not even the big banks were immune with shares in Commonwealth Bank (ASX: CBA) falling 1.5% to $154  and the remaining big four members also falling, with National Australia Bank (ASX: NAB) down by 1.4%, Westpac (ASX: WBC) by 2.4% and ANZ (ASX: ANZ) by 3.7%.

Macquarie (ASX: MQG) shares shed a very hefty 9% to $174.

Shares in the big miners were mixed, with Rio Tinto (ASX: RIO) shares up 0.7%,  BHP (ASX: BHP) down 0.5% and Fortescue (ASX: FMG) down 0.6%.

Most tariff exposed companies slashed

Companies with pronounced exposure to the tariffs continued to fall sharply with fashion retailer Cettire (ASX: CTT) dropping 8.1% and appliance maker Breville (ASX: BRG) down 12%.

Medical glove maker Ansell (ASX: ANN), which has heavy exposure to the US, was one of the few shares to gain 3% after it announced that it planned to offset the tariff increases through higher pricing.

Car accessories maker Amotiv (ASX: AOV) shares were crunched down 16.7% after it warned that the tariffs would not have a material impact, with investors begging to differ.

Small cap stock action

The Small Ords Index fell 6.4% for the week to close at 2866.6 points.

ASX 200 vs Small Ords

The week ahead

Economic announcements are sure to take a backseat to reactions to the US tariff moves, with the ongoing Australian election also increasing the potential for volatility and uncertainty locally.

Consumer and business confidence surveys due on Tuesday will show how consumers reacted to the 25 March federal budget, although those numbers will be very out of date when you consider the subsequent tariff changes.

Reserve Bank governor Michelle Bullock is speaking to the Chief Executive Women dinner on Thursday, so any remarks she makes about the increased possibility of interest rates will obviously interest the market.

The situation is similar overseas with inflation figures in the US and China being largely of academic interest when you consider the inflationary impact of the new tariff rises.

THIS WEEK’S TOP STOCKS