Trump’s Trade War Intensifies, Leading to Global Market Decline | Financial News
The intensification of Donald Trump’s trade warfare has triggered a worldwide market downturn, with US exchanges experiencing significant drops.
Technology and retail stocks were particularly hard hit as Wall Street commenced trading, following a broader risk-off sentiment across both Asia and Europe earlier that day.
The tech-heavy Nasdaq saw a decline of nearly 5%, while the S&P 500 dropped by 3%, and the Dow Jones Industrial Average fell just under 3% during initial trading.
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Experts indicated that the primary focus in the US hinges on the repercussions of the expanded tariff regime on the local economy, as well as its global sales ramifications, given the prevailing resentment among over 180 nations and territories affected by retaliatory tariffs on Mr. Trump‘s self-proclaimed “liberation day.”
These tariffs are set to be implemented next week, with existing tariffs on all car, steel, and aluminum imports already in effect.
Price increases are inevitable in the largest economy globally as the president’s new tariffs come into play, with these costs anticipated to be transferred down the supply chain to consumers.
The White House is optimistic that its tariff strategy will compel companies to establish factories and recruit workers in the US to avoid the additional charges.
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The latest numbers on tariffs
Economists caution that these added expenses will create upward pressure on inflation in the US, potentially dampening consumer demand and employment, increasing the risk of an economic recession.
Apple emerged as one of the largest casualties in terms of market value during Thursday’s trading, with its shares plummeting over 8%.
Other notable losses included Tesla, down nearly 6%, and Nvidia, which also fell by over 6%.
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PM: It’s ‘a new era’ for trade and economy
Numerous retail stocks, including those of Target and Footlocker, plummeted by more than 10% in market valuation.
The European Union is anticipated to respond with measures aimed at pressuring the US to relent.
The fear of a reciprocal trade conflict led to the CAC 40 in France and the German DAX decreasing by over 3% and 2.5%, respectively.
The internationally focused FTSE 100 dropped 1.7%, reaching a three-month low.
Moreover, many energy stocks saw substantial declines as Brent crude prices dipped by 6% to $70 due to projections that a trade war will hinder demand.
The FTSE 250, more aligned with domestic interests, fell by 1.8%.
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A softened dollar momentarily pushed the pound to a six-month peak against the US currency at $1.32.
Sean Sun, portfolio manager at Thornburg Investment Management, remarked on the situation: “Markets may actually be underreacting, especially if these rates are finalized, given the possible cascading effects on global consumption and trade.”
He emphasized the significant risk of escalating tensions through countermeasures against the US.
