Historical Market Value Loss Due to Tariffs Reaches €9.2 Trillion
Global stock markets experience unprecedented capital losses, with the U.S. and European markets significantly impacted.
The recent implementation of tariffs initiated by the Trump administration has led to a monumental destruction of market value, estimated at €9.2 trillion, equivalent to more than half of the European Union's GDP. This dramatic decline in global capitalisation has reached approximately $10 trillion, significantly surpassing the size of Latin America's economy.
On a particularly volatile Monday, the S&P 500 index, a key benchmark for U.S. stocks, recorded three consecutive drops totaling 4% for the first time since the Great Depression.
This decline marked the steepest fall recorded since the Black Monday crash of 1987, exceeding losses seen during the onset of the COVID-19 pandemic, Lehman Brothers' bankruptcy, and market downturns in 1998.
The Spanish stock market has similarly faced turmoil, with the Ibex 35 index losing 11.5% of its value over three sessions, amounting to a capital loss of €95.8 billion.
The banking sector has been particularly hard-hit, with Santander witnessing a loss of €16.8 billion, BBVA €11.1 billion, and CaixaBank €9.5 billion.
Collectively, the five largest Spanish banks incurred losses nearly equivalent to the rest of the index's 30 firms combined.
The second-largest loss was recorded by Inditex, which dropped €12 billion over three days, and Iberdrola, which lost €5.5 billion.
Notably, both Santander and Iberdrola fell below a capitalisation threshold of €100 billion during this tumultuous period.
In the United States, the impact of the tariff policies has led to significant capital loss among the so-called 'Magnificent Seven' tech companies—Apple, Google, Nvidia, Meta, Amazon, Microsoft, and Tesla.
These companies have collectively lost €1.5 trillion since last Thursday, with Apple leading the decline.
The tech giant has experienced a reduction of over $500 billion, falling below a $3 trillion valuation for the first time.
Nvidia and Amazon followed with losses of €385 billion and €262 billion, respectively.
The rapid price adjustments are expected to be influenced by impending price hikes of devices manufactured predominantly in Asia, particularly affecting Apple.
Outside the U.S., Saudi Aramco has seen a capital reduction of €126 billion, marking an 8% drop in valuation.
Traditional U.S. economic giants such as JP Morgan, Eli Lilly, Berkshire Hathaway, Visa, Exxon Mobil, Walmart, and Bank of America have also suffered, with combined losses exceeding €50 billion across three days.
Analysts have indicated that the current volatility may persist unless mitigating signs emerge, such as a stabilization of the U.S. economy or a reduction in tariff measures.
European firms, while also affected, have generally seen lesser capital losses compared to their American counterparts, attributed to their comparatively smaller scale.
Major European companies experiencing capital declines include HSBC and Shell from the UK, Siemens from Germany, LVMH and Total from France, and SAP from Germany.
Additionally, companies like China's Alibaba, Japan's Toyota and Mitsubishi, and Taiwan's TSMC have reported substantial valuation drops, contributing to the widespread global market instability.
As negotiations remain absent, market experts warn that additional periods of volatility may ensue, potentially signalling a significant shift in global economic dynamics.
The implications of this tariff-driven market upheaval reflect broader concerns regarding the future of global trade stability.
On a particularly volatile Monday, the S&P 500 index, a key benchmark for U.S. stocks, recorded three consecutive drops totaling 4% for the first time since the Great Depression.
This decline marked the steepest fall recorded since the Black Monday crash of 1987, exceeding losses seen during the onset of the COVID-19 pandemic, Lehman Brothers' bankruptcy, and market downturns in 1998.
The Spanish stock market has similarly faced turmoil, with the Ibex 35 index losing 11.5% of its value over three sessions, amounting to a capital loss of €95.8 billion.
The banking sector has been particularly hard-hit, with Santander witnessing a loss of €16.8 billion, BBVA €11.1 billion, and CaixaBank €9.5 billion.
Collectively, the five largest Spanish banks incurred losses nearly equivalent to the rest of the index's 30 firms combined.
The second-largest loss was recorded by Inditex, which dropped €12 billion over three days, and Iberdrola, which lost €5.5 billion.
Notably, both Santander and Iberdrola fell below a capitalisation threshold of €100 billion during this tumultuous period.
In the United States, the impact of the tariff policies has led to significant capital loss among the so-called 'Magnificent Seven' tech companies—Apple, Google, Nvidia, Meta, Amazon, Microsoft, and Tesla.
These companies have collectively lost €1.5 trillion since last Thursday, with Apple leading the decline.
The tech giant has experienced a reduction of over $500 billion, falling below a $3 trillion valuation for the first time.
Nvidia and Amazon followed with losses of €385 billion and €262 billion, respectively.
The rapid price adjustments are expected to be influenced by impending price hikes of devices manufactured predominantly in Asia, particularly affecting Apple.
Outside the U.S., Saudi Aramco has seen a capital reduction of €126 billion, marking an 8% drop in valuation.
Traditional U.S. economic giants such as JP Morgan, Eli Lilly, Berkshire Hathaway, Visa, Exxon Mobil, Walmart, and Bank of America have also suffered, with combined losses exceeding €50 billion across three days.
Analysts have indicated that the current volatility may persist unless mitigating signs emerge, such as a stabilization of the U.S. economy or a reduction in tariff measures.
European firms, while also affected, have generally seen lesser capital losses compared to their American counterparts, attributed to their comparatively smaller scale.
Major European companies experiencing capital declines include HSBC and Shell from the UK, Siemens from Germany, LVMH and Total from France, and SAP from Germany.
Additionally, companies like China's Alibaba, Japan's Toyota and Mitsubishi, and Taiwan's TSMC have reported substantial valuation drops, contributing to the widespread global market instability.
As negotiations remain absent, market experts warn that additional periods of volatility may ensue, potentially signalling a significant shift in global economic dynamics.
The implications of this tariff-driven market upheaval reflect broader concerns regarding the future of global trade stability.
Translation:
Translated by AI
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