Stock markets worldwide plunge upon revelation of Trump's tariff reveal
The global stock market experienced a downturn this week, with Europe's benchmark Stoxx 600 index sinking 1.5%, the DAX in Germany dropping 2.2%, and France's CAC 40 falling 2.6%. The US economy added fewer jobs than expected in July, with only 73,000 new jobs, causing further concern.
President Trump's proposed tariffs have created significant uncertainty and disruption in global stock markets and economies. The tariff escalations, targeting a wide range of U.S.-origin goods, have contributed to increased trade tensions and the risk of retaliatory measures.
The broader impact of these tariffs includes volatility in global stock markets, rising costs for businesses and consumers, disruptions to global supply chains, and potential retaliatory tariffs and trade wars. These factors have led to increased market sell-offs, higher prices for goods and materials, difficulties in key sectors, and slower economic growth.
In the US, the blue-chip Dow has dropped every day this week due to Trump's tariffs. Shares in Amazon fell 6.7% on Friday, while the S&P 500 and the tech-heavy Nasdaq Composite slipped 1.6% and 2.1%, respectively. Treasury bonds rallied as investors snapped up bonds in a flight to safety and to lock in high rates.
The US dollar also dropped, with the dollar index falling 1.1%. In Asia, Hong Kong's Hang Seng index dropped 1.07%, and Taiwan's benchmark index sank 0.46%. Japan's Nikkei 225 fell 0.66%.
Derek Halpenny, head of research for global markets at MUFG, predicts that tariffs will ultimately be dollar negative over time. The S&P 500 is on track for its fourth-straight day of losses after previously clinching six consecutive days of record highs.
Trump's tariff plan includes tariffs ranging from 10% to 41% on countries from Chile to Syria, set to take effect August 7. The proposed tariffs threaten to upend decades of international cooperation and further exacerbate global economic uncertainty, presenting risks of slower growth and increased market volatility.
Investors are rethinking their strategies in the face of President Trump's proposed tariffs, as they consider the potential impacts on businesses, finance, and the stock market. Rising costs, disrupted supply chains, and increased market volatility could result from these tariffs, leading to a sell-off in markets such as the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite.
