Announcements of tariffs may cause the market to respond unfavorably, with Dow Jones Futures falling as a result of inflation worries. As investors await counter-tariffs from trading partners, higher tariffs could postpone rate cuts by the US Federal Reserve, which would affect market sentiment and economic growth.
The U.S. stock market is experiencing singnificant volatility due to President Trup’s recent tariff announcrments. Stock futures dropping over 800 points and Nasdaq futures leading the decline.Despite initial rebounds in stocks like Tesla and Amazon, the overall market sentiment remains negative deu to fears of a trade war and economic downturn. The S&P 500 has seen substantial declines, and investor uncertainty persists as the tariffs are expected to impact U.S. trading relationships globally.
Today’s global stock market: Following President Donald Trump’s announcement of global reciprocal tariffs on Wednesday, which is believed to start a huge trade war, US stock futures fell precipitously, as was to be expected.
Following tariff announcements, Dow Jones Futures fell by roughly 1.5%, indicating market apprehension over the possible economic consequences of Trump’s tariff actions.
Meanwhile, major Wall Street indices ended higher on April 2 ahead of US President Donald Trump’s reciprocal tariff announcements in hopes that tariffs would be milder and that there would be countries and product-specific exclusions.
The S&P 500 and Dow Jones increased by 0.51% and 0.62%, respectively, while the Nasdaq closed 0.87 percent higher.
Asian Markets
After Trump announced reciprocal tariffs, Asian markets fell precipitously on Thursday. Outside of Japan, MSCI’s broadest index of Asia-Pacific stocks experienced a more than 1% decline.
After plunging to an eight-month low, Japan’s Nikkei recovered some of its losses and was down 3% at the end of the day. The index of Topix dropped 3.1%.
The Shanghai Composite Index dipped 0.1%, and the CSI300 index fell 0.24% among Chinese markets. The Kosdaq declined 0.55% while the South Korean Kospi index fell 1.57%. The Hang Seng index for Hong Kong fell 2%.
Reciprocal Tariffs on Trump
Trump declared tariffs on China, the European Union, Taiwan, Japan, and India, among other important US trading partners. He declared he will increase charges on several of the United States’ largest trading partners and apply a baseline 10% tariff on all imports to the US starting on April 5.
About half of what they currently charge us will be charged to them. Therefore, the tariffs won’t be fully reciprocal,” he stated.
Donald Trump levied reciprocal duties of 26% on India, 34% on China, 20% on the EU, and 24% on Japan.
In addition, he reaffirmed his intention to impose a 25% car tariff, a move that might have a big effect on nations like Korea and Japan.
How might Trump’s tariffs affect US markets?
According to Dow Jones Futures, the market may respond negatively to tariff announcements right away because of worries that they will hinder economic development and raise US inflation.
According to some analysts, the duties are more than expected, which can upset market sentiment.
According to Brian Mulberry, portfolio manager at Zacks Investment Management, “markets were anticipating a good, bad, or ugly scenario on tariffs, and this reciprocal tariff is leaning more into the ugly scenario, meaning that the total amount of tariff when you average out is slightly higher than what was anticipated,” according to Reuters.
Trump did, however, propose reciprocal duties that are only half as high as those imposed by other nations on US goods, allowing for discussion rather than retribution.
However, in order to promote dialogue rather than retaliation, Trump suggested reciprocal duties that are only half as high as those levied by other countries on US exports.
If US trading partners announced counter-tariffs, investors would pay close attention. A deeper trade war might result from this, which would have a disastrous effect on the dynamics of global economy and inflation.
Disclaimer: The sole intention of this story is education. FFI Â does not endorse the opinions and suggestions expressed above; they are the opinions of individual analysts or broking firms. Since situations can change and market conditions can change quickly, we suggest clients to consult with qualified specialists before making any investment decisions.
