US Stocks Slump Amid Worsening Trade Tensions and Tariffs
The US stock market plummeted on Friday, with the Dow Jones Industrial Average falling over 2,200 points, or 5.5%, to its lowest level in nearly a year. The Nasdaq Composite entered bear market territory, shedding 963 points, or 5.8%. These losses erase trillions of dollars in investor wealth and wipe out more than a year’s worth of gains.
The sell-off is attributed to concerns about the economic impact of new US tariffs on key trading partners, particularly China. President Trump’s announcement of steep tariffs has sent shockwaves through financial markets, prompting economists to revise downward their forecasts for US economic growth. Federal Reserve Chair Jerome Powell warned that the levies will boost inflation and slow economic growth.
Analysts predict a significant downturn in the US economy if the current trade policies are not revised. Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management, said that the effective tariff rates could be higher still, leading to a downside scenario, including a meaningful US recession and lower equity markets.
The market’s decline is mirrored by overseas markets, with Tokyo’s Nikkei 225 dropping 2.8% and South Korea’s Kospi sinking 0.9%. The US growth outlook has been downgraded, with economists predicting higher inflation and reduced consumer spending.
Investors are also watching closely as China strikes back against US tariffs, imposing a 34% tariff on imports of all US products starting April 10. The Chinese Commerce Ministry announced tighter restrictions on exports of rare earths and trade sanctions on 27 additional US companies.
Source: https://www.cbsnews.com/news/dow-jones-stocks-today-djia-trump-tariffs