Wall Street Suffers Major Losses Amid Escalating Trade Tensions
U.S. markets drop nearly 6% as global tariff conflicts raise recession fears.
Major indexes on Wall Street experienced significant declines on Friday, closing nearly 6% lower in a tumultuous trading session marked by escalating global tariff disputes initiated by U.S. President Donald Trump.
By the market's close, the S&P 500 plummeted by 5.97%, the Nasdaq fell by 5.82%, and the Dow Jones Industrial Average decreased by 5.5%, reflecting heightened investor anxiety regarding the potential onset of a trade war and the prospect of an economic recession.
The volatility index surged by 50%, indicating the sharp fluctuations in investor sentiment.
This marked the worst trading day for U.S. stocks since 2020, during the COVID-19 pandemic, exceeding the steep losses from the previous day.
In just two days responding to the tariff announcements, Wall Street witnessed a staggering loss of approximately $6.4 trillion in market value, a record-breaking figure.
Cumulatively, since Trump's inauguration, the market capitalization loss is estimated to be around $10 trillion.
Over the week, the Nasdaq dropped by 10%, the S&P 500 by 9%, and the Dow by 7.9%.
All corporate sectors concluded the day in negative territory, with the energy sector suffering the most, down 8.7%, followed by financials, which fell by 7.4%, and technology companies, which declined by 6.3%.
Specific firms that faced notable losses included ConocoPhillips (-9.5%), Chevron (-8.3%), Nvidia (-7.4%), and Tesla (-10.4%), alongside major financial institutions such as JPMorgan, which fell by 7.5%, and Citigroup, which dropped by 8.1%.
On Wednesday, President Trump announced a 10% global tariff set to take effect imminently, with higher tariffs aimed at significant trading partners, including the European Union and China.
However, in Thursday's remarks, he expressed a willingness to negotiate if affected parties presented a 'phenomenal' offer.
In retaliation, China announced a 34% tariff on U.S. imports, mirroring the U.S. levies, scheduled to take effect on April 10. Additionally, China indicated it would impose sanctions on U.S. companies and restrict the export of rare earth materials.
Trump's late-session comments on social media, suggesting that 'only the weak will fail,' did not appease market concerns as he accused China of panicking over the trade conflicts.
JPMorgan Chase, the largest bank in the U.S., raised its forecast for the likelihood of a global recession from 40% to 60%, attributing the rise to the economic repercussions of the steep tariffs imposed.
Meanwhile, Federal Reserve Chair Jerome Powell warned that tariffs could lead to increased inflation and reduced economic growth, noting that uncertainties preclude discussions on interest rate cuts.
The price of West Texas Intermediate (WTI) crude oil declined by 7.41%, settling at $61.99 per barrel, which is the lowest price recorded since 2021. This decrease was attributed to the tit-for-tat tariff actions between the U.S. and China, an unexpected increase in oil production from OPEC+, and recession fears.
In other markets, the yield on the 10-year Treasury bond fell to 4.017%, while gold prices decreased to $3,057 per ounce.
The U.S. dollar strengthened against the euro, trading at a rate of 1.0944, and Bitcoin saw a modest increase of 1%, reaching $83,994.
By the market's close, the S&P 500 plummeted by 5.97%, the Nasdaq fell by 5.82%, and the Dow Jones Industrial Average decreased by 5.5%, reflecting heightened investor anxiety regarding the potential onset of a trade war and the prospect of an economic recession.
The volatility index surged by 50%, indicating the sharp fluctuations in investor sentiment.
This marked the worst trading day for U.S. stocks since 2020, during the COVID-19 pandemic, exceeding the steep losses from the previous day.
In just two days responding to the tariff announcements, Wall Street witnessed a staggering loss of approximately $6.4 trillion in market value, a record-breaking figure.
Cumulatively, since Trump's inauguration, the market capitalization loss is estimated to be around $10 trillion.
Over the week, the Nasdaq dropped by 10%, the S&P 500 by 9%, and the Dow by 7.9%.
All corporate sectors concluded the day in negative territory, with the energy sector suffering the most, down 8.7%, followed by financials, which fell by 7.4%, and technology companies, which declined by 6.3%.
Specific firms that faced notable losses included ConocoPhillips (-9.5%), Chevron (-8.3%), Nvidia (-7.4%), and Tesla (-10.4%), alongside major financial institutions such as JPMorgan, which fell by 7.5%, and Citigroup, which dropped by 8.1%.
On Wednesday, President Trump announced a 10% global tariff set to take effect imminently, with higher tariffs aimed at significant trading partners, including the European Union and China.
However, in Thursday's remarks, he expressed a willingness to negotiate if affected parties presented a 'phenomenal' offer.
In retaliation, China announced a 34% tariff on U.S. imports, mirroring the U.S. levies, scheduled to take effect on April 10. Additionally, China indicated it would impose sanctions on U.S. companies and restrict the export of rare earth materials.
Trump's late-session comments on social media, suggesting that 'only the weak will fail,' did not appease market concerns as he accused China of panicking over the trade conflicts.
JPMorgan Chase, the largest bank in the U.S., raised its forecast for the likelihood of a global recession from 40% to 60%, attributing the rise to the economic repercussions of the steep tariffs imposed.
Meanwhile, Federal Reserve Chair Jerome Powell warned that tariffs could lead to increased inflation and reduced economic growth, noting that uncertainties preclude discussions on interest rate cuts.
The price of West Texas Intermediate (WTI) crude oil declined by 7.41%, settling at $61.99 per barrel, which is the lowest price recorded since 2021. This decrease was attributed to the tit-for-tat tariff actions between the U.S. and China, an unexpected increase in oil production from OPEC+, and recession fears.
In other markets, the yield on the 10-year Treasury bond fell to 4.017%, while gold prices decreased to $3,057 per ounce.
The U.S. dollar strengthened against the euro, trading at a rate of 1.0944, and Bitcoin saw a modest increase of 1%, reaching $83,994.
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