Dollar, Stocks Sink, Gold Hits High On Trump Tariffs
President Donald Trump’s recent imposition of tariffs on countries globally has led to a significant impact on the dollar and equity markets. This move has escalated concerns of a trade war that could potentially trigger a recession and increase inflation.
The dollar experienced a sharp decline, dropping by up to 2.6 percent against the euro, marking its most significant intraday plunge in ten years. It also faced considerable losses against the yen and British pound. Stock markets, including Tokyo’s Nikkei and US futures, saw a plunge, with major sectors such as auto, luxury, and banking taking substantial hits.
Oil prices witnessed a 4.5 percent plummet, while gold saw a surge, reaching a new peak of $3,167.84 per ounce.
The announcement of the tariffs prompted a negative reaction from the markets, leading to a flight to safe-haven assets. This has raised speculations about the Federal Reserve considering additional rate cuts to prevent a recession while managing rising inflation pressures.
Trump’s aggressive tariff measures targeted countries that he accused of taking advantage of the United States for years. The levies included a 34 percent tariff on China, 20 percent on the European Union, and 24 percent on Japan. Auto tariffs of 25 percent also went into effect.
Anticipating retaliatory actions, investors are on edge as governments express their discontent. China, Japan, Taiwan, the European Union, and other countries have condemned the tariffs and hinted at potential countermeasures.
Global stock markets reacted negatively to the news, with Tokyo, Hong Kong, Sydney, Seoul, Manila, Mumbai, Shanghai, and Singapore all experiencing declines. However, New Zealand managed to mitigate losses due to smaller tariffs, while Vietnam’s stock exchange suffered a significant drop following hefty levies.
Wall Street futures mirrored the global sentiment, with the Dow, Nasdaq, and S&P 500 all facing declines. Treasury yields hit five-month lows amidst the market turmoil.
