Wall Street Plummets As Donald Trump's Tariffs Create Havoc - 5 Reasons

Wall Street Plummets: A day after US President Donald Trump announced tariffs on countries across the world, the US market reacted sharply and opened significantly lower.

Dow Jones Industrial Average (DJIA) opened sharply lower by over 1300 points, while the S&P 500 fell 3.63 per cent. Tech-heavy NASDAQ was down 4 per cent.

Top Laggards

Apple fell 8.95 per cent, while Elon Musk's Tesla stock was down almost 5 per cent at market open. Amazon , led by billionaire Jeff Bezos was trading 7 per cent down. The widespread mayhem on Wall Street shot the fear Index, CBOE VIX, by 24 per cent.

Wall Street Plummets: 5 Reasons

1. Donald Trump announced blanket tariffs across major trading partners, triggering fears of a recession in the United States.
2. The tariffs, imposed on countries exporting to the US, may hurt the citizens of the United States, analysts believe. According to independent estimates, the tariffs could dent pockets of common American citizens by about $3000 per year.
3. Wall Street had long expected Trump would use tariffs as a tool for negotiating with other countries, rather than as a long-term policy.
4. However, Trump's decision on Wednesday suggests that tariffs are more than just an opening bid in a poker game; they may be used to assist achieve an ideological goal, such as bringing manufacturing jobs back to the US.
5. Major Wall Street banks, including JPMorgan Chase, Citigroup, and Bank of America, faced stock declines of 5.3% to 8%, driven by concerns over economic risks and a slowdown in mergers, acquisitions, and IPO activities. Lower consumer confidence has raised fears of reduced spending and loan demand, contributing to a 6% drop in the S&P 500 banks index and a 5.3% fall in the KRW Regional bank index.

Also Read: Tariffs Will Depress Economic Growth, Says Top Economist

Asian Markets Today

Major Asian stock markets closed lower today after US President Donald Trump placed tariffs on trading partners around the world.  Japan's Nikkei plummeted more than 2.8 per cent, Hong Kong's Hang Seng index sank more than 1.5 per cent, South Korea's Kospi fell more than 0.7 per cent, Singapore's Strait Times index fell 0.3 per cent, and China's Shanghai Composite index ended 0.24 per cent lower.

European Markets Today

Major European indices were trading much down France's CAC 40 was trading more than 3% lower, Germany's DAX was down more than 2.55%, and London's FTSE 100 was down more than 1.6%.