new York
Cnn
–
The American stock market, freshly out of its third best day in modern history, returns in reality: although President Donald Trump has interrupted most of his “reciprocal” prices, his other massive import taxes have already inflicted significant damage and the economy does not easily recover from the fallout.
The DOW, after having increased by almost 3,000 points on Wednesday, dropped by more than 1,000 points, or 2.68%, Thursday morning. The S&P 500 fell by 3.2% and the NASDAQ composite slipped by 3.8%. The S&P 500 has come from its best day since 2008, and the Nasdaq published its best daily gains on Wednesday in history.
The merchants were delighted that Trump temporarily canceled his so-called reciprocal rates, which are not really reciprocal, for 90 days. These prices have placed heavy levies between 11% and 50% on dozens of countries.
The term contracts on shares also responded somewhat positively to the announcement of the European Union that it would temporarily put in the break its reprisals in the United States in the hope of a trade agreement negotiated after the return of Trump. Trump and the Treasury Secretary, Scott Bessent, said that more than 70 countries were lining up to negotiate trade agreements with the United States to get out of the prices, and the Trump administration wanted to give time to conclude agreements.
But even after Trump’s face, reality remains austere: economists have declared that economic damage was caused, and many say that there is always a high risk of an American and global recession. The actions are still well below the place where they were before Trump reveals his “liberation day” prices last week, and these major stock market losses, the existing prices and the high degree of uncertainty concerning American trade policy are sufficient to sink the economy, they say.
The universal tariff of 10% of Trump which entered into force on Saturday remains in place, just like 25% of tariffs on automotive imports, 25% of steel and aluminum prices and 25% of tariffs on certain goods from Canada and Mexico. Trump is also committed to advancing with additional prices on pharmaceutical products, wood, semiconductors and copper.
Goldman Sachs said on Wednesday after Trump’s partial relaxation that the chances of recession in the United States were still a reversal of parts. On Wednesday evening, JPMorgan said that the bank would not change its recession forecasts, still seeing 60% of an American and global recession even after Trump’s “positive” decision to relax his “draconian” prices specific to the country.
“My feeling here is that the (American) economy is still likely to fall into the recession, given the level of simultaneous shock that it is absorbed,” Joe Brusuelas, chief economist of the Consulting Consulting RSM, told CNN. “All of this is to temporarily postpone what will probably be a series of taxes in terms of punitive import on the American commercial allies.”
New data on Thursday has shown that inflation in the United States has slowed heavily in March. Although this is generally good news for investors, the emphasis on Wall Street is firmly on the prices and prospects for the economy in the future.
“Thursday (data) is for Mars, which is back and does not say much about the market on how recent prices, although many of them on pause, affect consumer prices,” said Skyler Weinand, director of investments at Regan Capital.
Meanwhile, Trump does not withdraw his alarming trade war with China – in fact, that gets worse. Trump increased his prices on Chinese imports to 125% on Wednesday; And Thursday, the prices for reprisal from Beijing 84% on American imports in China entered into force.
China says that it remains ready to negotiate with the United States, but a spokesman for the Chinese Ministry of Commerce also reiterated Thursday that China does not decrease if Trump chooses to degenerate the trade war further.
“The door of the talks is open, but the dialogue must be carried out on the basis of mutual respect and equality,” said the spokesperson. “We hope that the United States will meet China halfway and work to resolve differences through dialogue and consultation.”
“If the United States chooses the confrontation, China will respond in kind. Pressure, threats and blackmail are not the right ways to deal with China,” said the spokesman.
Some billionaire investors, who pressure Trump to support his punishing prices, have been delighted that the president took a break.
“There are better ways to manage our unbearable debt and imbalance problems, and President Trump’s decision to take a step back in a worse manner and negotiate how to manage these imbalances is a much better way,” said billionaire investor Ray Dalio in an article on X Wednesday, adding: “I hope … He will do the same with the Chinese.”
But signs of stress remain on the markets beyond actions. The bond market, which sold rapidly alarmingly – the 5 -year -old treasury yield exceeded 4.5% on Wednesday against less than 4% earlier in the week – cooled a little on Thursday. Yields increase when bond prices drop.
But the 10 -year yield was 4.3% Thursday morning. It is not exactly a vote of confidence.
“The obligations point out that the break is important, but little has fundamentally changed,” Ing analysts told investors on Thursday. “The markets will not easily forget these episodes with large market oscillations.”
Oil prices have also remained under pressure. US oil fell again on Thursday at $ 60 per barrel, near the place where oil was in April 2021. Prices were considerably less than $ 57 a barrel on Wednesday before recovering. Brent Crude, the world reference, also dropped from 4.7% to around $ 62 per barrel.
The US dollar index, which measures the strength of the dollar compared to six foreign currencies, released 1.5% Thursday morning, reaching its lowest level since early October. The dollar has largely weakened this year, a sign of concern for investors concerning the health and stability of the American economy.
However, the world markets were suddenly found themselves on Thursday.
The Japanese reference Japanese index Nikkei 225 finished more than 9% more, while the Kospi index in South Korea increased by 6.6%. The Hong Kong Hang Seng index jumped 2.1%. Taiwan’s Taiex increased by 9.3%. In Australia, ASX 200 closed 4.5%up.
European actions jumped after the president of the European Commission, Ursula von der Leyen, made a reprisal rate pause and said that she welcomes Trump’s decision to suspend her “reciprocal” prices.
“This is an important step towards stabilization of the world economy,” she said in a statement on Thursday. “Clear and predictable conditions are essential for commercial and supply chains to work.”
The Benchmark Stoxx 600 index in Europe was 4.5% higher Thursday. The France CAC index increased by 4.5%and Germany jumped 5.2%, while the FTSE 100 index in London increased by 3.7%.
