By Stan Choe, associate commercial writer
New York (AP) – Financial markets around the world are in shock from Thursday after the last and most serious stolen from President Donald Trump, and the US stock market could take the worst.
The S&P 500 fell 3.3% at the start of negotiations, worse than decreases for other major stock markets. The industrial average of Dow Jones fell by 1,160 points, or 2.7%, at 9 h 32, Eastern time, and the NASDAQ composite was more than 4.5%.
Little was spared, because fear is evasing the global scale of the potentially toxic combination of higher inflation and weakening of economic growth that prices can create. Prices have dropped for everything, from crude oil to large technological actions to small businesses that are only investing in American real estate. Even Gold, who recently reached records when investors have sought something more sure to have, lowered. The value of the US dollar has also slipped against other currencies, including the euro and the Canadian dollar.
Investors around the world knew that Trump was going to announce a set of radical rates on Wednesday evening, and the fears around him had already produced the S&P 500 to 10% below its top of all time. But Trump still managed to surprise them with “the worst case for prices”, according to Mary Ann Bartels, director of investments at Sanctuary Wealth.
https://www.youtube.com/watch?v=wp8cy5ofd8
Trump announced a minimum rate of 10% on imports from all countries, the tax rate being much higher on the products of certain countries such as China and those of the European Union. It is “plausible” that prices, which competes with invisible levels in approximately a century, could bring down American economic growth of 2 percentage points this year and increase inflation almost 5%, according to UBS.
Such a success would be so frightening that it “made his rational mind consider the possibility that they remain so low”, according to Bhanu Baweja and other strategists of UBS.
Wall Street had long assumed that Trump would use prices simply as a tool for negotiations with other countries, rather than a long -term policy. But Wednesday’s pricing announcement can suggest that Trump sees more prices as helping to solve an ideological objective – retraction of manufacturing jobs in the United States, for example – than a simple opening bet in a poker game.
If Trump follows his prices, equity prices may have to lower much more than 10% of their summit of all time in order to reflect the global recession that could follow, as well as the profits that US companies could take because of them.
“The markets can in fact be under-relief, especially if these rates prove to be final, given the potential effects of violation of consumption and global trade,” said Sean Sun, portfolio director at Thornburg Investment Management, although he considers Trump’s announcement on Wednesday as more than one opening decision than a final point for politics.
A joker is that the federal reserve could reduce interest rates to support the economy. This is what he did at the end of last year. The drop in interest rates helps facilitate borrowing and American households to borrow and spend.
The yields on Treasurys fell partly on the increase in expectations for future reductions, as well as the general fear of the health of the American economy. The yield on the 10 -year treasure fell at 4.03%, compared to 4.20% Wednesday evening and around 4.80% in January. This is a huge decision for the bond market.
The Fed may have less the freedom to move than it would like. Although lower rates can brighten up the economy, they can also grow on inflation. And concerns about inflation is already aggravated due to prices. The Fed has no good tool to repair what is called “stagflation”, where the economy stagnates and inflation remains high.
The concerns of this worst scenario have overturned the actions in the industries, causing reductions for three out of four stocks that make up the S&P 500.
Nike dropped by 10.7% because so many of its products are made outside the United States. United Airlines lost 9.2% because customers were worried about the global economy may not take as much for businesses or feel enough to take a vacation. The Dollar Tree reduced retailer dropped 11.3% in the middle of the concerns that his customers, already eager by an even high inflation, can be even more stressed.
Some of the heaviest weights on the market were those who had climbed earlier in the frenzy of Wall Street around the frenzy of artificial intelligence. Critics said they were looking for the most flagrant in a global market that already seemed too expensive after their prices have been higher in recent years.
Nvidia sank 5.1% to lead to its loss for the year up to 22%. He had more than doubled last year after having more than tripled in 2023. Palant Technologies, which offers an AI platform for customers, flowed 4.1%. Super Micro Computer, who makes servers, lost 8.2%.
In the stock markets abroad, the indices have dropped strongly in the world. The CAC 40 French fell by 3.1% and the German Dax lost 2.4% in Europe.
The Nikkei 225 of Japan dropped by 2.8%, the Hang Seng of Hong Kong lost 1.5%and the Kospi of South Korea dropped by 0.8%.
Commercial editors AP Matt Ott and Elaine Kurtenbach contributed.
Originally published:
California Daily Newspapers
