US stocks fluctuate amid Trump’s tariff-induced trade war

US stocks face volatility as Trump’s tariffs spark fears of a global trade war and economic downturn.

In Short

President Trump’s tariff announcement on Canada and Mexico caused significant volatility in US stocks and raised fears of a global trade war. Experts warn that these tariffs could have severe economic impacts, while markets worldwide reacted negatively.

US stocks experienced significant volatility following President Donald Trump’s announcement of tariffs on Canada and Mexico, raising concerns about a potential global trade war.

The Dow Jones Industrial Average fell around 800 points at one point, ultimately closing down about 300 points, or 0.7%. Meanwhile, the S&P 500 decreased by 0.3% while the Nasdaq Composite recovered slightly, rising by 0.4%.

The VIX index, which reflects market fear, reached its highest level of the year.

Great Depression

Experts warn that these tariffs could lead to severe economic consequences reminiscent of the Great Depression, as noted by Andrew Wilson of the International Chamber of Commerce. He expressed concern that this might initiate a downward economic spiral.

The S&P 500 index has largely lost its gains since Trump’s reelection, falling below critical moving averages, indicating investor unease.

Markets worldwide reacted negatively. The STOXX Europe 600 index dropped by 2.14%, Germany’s DAX by 3.54%, while Japan’s Nikkei 225 fell by 1.2%.

The US dollar weakened, with notable declines in Mexico’s peso and the Canadian dollar following the tariff announcements. Futures for gold rose, indicating increased uncertainty.