Has America really returned or is it heading towards a free fall? Credit: ShutterStock: Rokas Tenys
The introduction of tariffs announced by President Donald Trump on April 2 led investors to enter the tailspin, resulting in an incredible loss of $4 trillion (3.6 trillion euros) in market value.
This compares to the S&P 500 peak a month ago when Wall Street appeared to be full of optimism about Trump and his policy agenda. Conversely, the introduction of new policies such as tariff measures has destabilized this position. Businesses, consumers and investors all lose confidence, and as a result, stock prices have plummeted across virtually every sector.
Do tariffs affect the stock market?
But somewhat surprising, President Trump appears to be in stages in this development, and may say he is “bulky” in his response at a recent press conference. He said: “The market is booming, inventory is booming, and the country is booming,” he said, claiming that his response to economic policies is “going very well.”
Many well-known companies will be pleading for different things as they will be significantly reduced as a direct result of these latest tariffs. The most painful so far is within the tech industry, including the giants sometimes called the “magnificent seven.” For example, Apple, Amazon and Meta all fell 9% in stocks. Alongside them, Nvidia saw prices fell 8%, while Tesla shared 5% and Alphabet 4%. Even Microsoft did not escape unharmed as they witnessed a 2% drop.
What causes the stock market to fall?
More misery has been fueled in the retail sector, but this was also hit hard, with stocks in Best Buy, Target and Dollar Tree each plunging more than 11%. Due to its heavy reliance on manufacturing in China and Vietnam, sports brand Nike has sunk in its stock price value by more than 10%. This is seen as a direct result of the impact of recent tariff measures on both countries.
Even financial services did not avoid the impact of a turbulent Thursday as both American Express and Bank of America reported losses of 11% and 10% respectively. As a result, Wall Street is said to have experienced the worst day due to the height of the Covid collision.
For now, everyone’s lips have the words “recession” and whether the US is in a hurry towards one, or the worst, or the whole world.
To you – do you think President Trump’s tariff measures are a far-fetched step?
