Global markets plummeted as US President Trump’s tariffs on Canada, Mexico, and China sent shockwaves through the financial world. The S&P 500 fell 1.2%, with tech stocks making some gains in afternoon trading, but overall, the sector was among the hardest-hit.
Investors lost confidence in business-friendly policies, instead fearing the impact of levies on tariffs. Government debt yields plummeted to their lowest level since October, while investor expectations for Federal Reserve interest rate cuts shifted significantly.
The longer-term effect is expected to be slower economic growth and a risk of an economic downturn, prompting investors to expect three rate cuts this year. Economists warn that a trade war carries significant risks to global growth.
Key indicators fell sharply: the Nasdaq Composite dropped 9.4% since its high in December, while the S&P 500 fell 6% from its mid-February peak. The Russell 2000 index of smaller companies has already fallen into correction and is approaching a bear market.
Major stocks, including Ford, General Motors, Tesla, United Airlines, and Delta, suffered significant losses amid fears of a trade war slowing the economy and reducing travel spending. European stocks also came under pressure, with Germany’s benchmark index dropping 3.5% and Volkswagen falling about 3%.
Source: https://www.nytimes.com/2025/03/04/business/stock-market-today-trump-tariffs.html