US Stock Market Dives Due to Trump Tariffs and Recession Worries

Global Sell-Off: New Tariffs Trigger Market Turmoil

On Thursday, the US stock market plummeted, with the Dow Jones Industrial Average shedding 1,400 points (3.3%). Investors grew anxious over President Donald Trump’s recent tariff hikes.

Market Performance and Global Repercussions

• The S&P 500 slid by 4%.
• The Nasdaq Composite tumbled 5.1%.
• The S&P 500 was on track for its worst day since the COVID-19 outbreak in 2020.
• European and Asian stock indexes also recorded hefty losses.

Tariffs and Economic Jitters

New tariffs, such as a 10% base tax on numerous goods, have unnerved investors. Fears of inflation and slower economic growth have led to declines in commodities, tech stocks, and even gold prices.

Trump’s Tariffs and Possible Economic Fallout

• These tariffs target imports from China and the European Union.
• Economists caution that US economic growth could shrink by up to 2 percentage points this year.
• Inflation might climb close to 5%, potentially tipping the economy into a recession.

Federal Reserve’s Predicament

The Federal Reserve is in a tight spot. While lowering interest rates could boost the economy, such moves might also fuel inflation. The yield on the 10-year US Treasury note dipped to 4.04% from 4.20%, signaling mounting concerns about the economy’s future.

Indicators of Economic Stress

• Unemployment claims stayed below expectations, suggesting a steady job market.
• Weaker-than-expected growth in US service sectors underscored the broader tariff impacts.
• Businesses cited supply chain disruptions, escalating material costs, and delivery delays.

Corporate Shares and Overseas Markets

Corporate shares took a severe beating, with retailers and airlines among the hardest hit. European and Asian markets mirrored the downward trend.