Stock market turmoil intensified after U.S. President Donald Trump’s sweeping tariff announcement, sending global investors into a panic. The U.S. stock market took one of its worst hits in recent months, with the S&P 500 dropping 3.3%, the Dow Jones Industrial Average falling 1,160 points (2.7%), and the Nasdaq composite declining by 4.5%. Widespread fear over rising inflation, economic slowdown, and trade wars led to a sharp sell-off across industries.

Stock Market Faces Steep Decline

The stock market downturn extended beyond equities, affecting commodities and currencies. Crude oil prices slipped, real estate stocks dropped, and even gold—traditionally a safe haven—experienced losses. Meanwhile, the U.S. dollar weakened against major currencies, including the euro and Canadian dollar, further amplifying economic concerns.

Trump’s Tariffs Spark Economic Concerns

Trump’s latest tariffs impose a minimum 10% tax on imports from all countries, with even higher levies targeting China and the European Union. According to UBS analysts, these measures could cut U.S. economic growth by 2 percentage points this year and push inflation close to 5%. The combination of slower growth and rising prices has raised fears of “stagflation,” a scenario that the Federal Reserve has limited tools to combat.

Initially, Wall Street had assumed Trump’s tariffs were a bargaining chip rather than a permanent policy. However, his latest move suggests a deeper ideological shift toward economic nationalism, aimed at bringing manufacturing jobs back to the U.S. If these tariffs remain in place, analysts warn that stock market losses could deepen, potentially triggering a global recession.

Market Reactions and Federal Reserve’s Role

Investor panic caused Treasury yields to plummet, with the 10-year yield falling from 4.20% to 4.03%, reflecting expectations of Federal Reserve interest rate cuts to stabilize the economy. However, lower rates could also fuel inflation, placing the Fed in a difficult position.

Major corporations bore the brunt of the sell-off. Nike fell 10.7% due to its reliance on overseas manufacturing, United Airlines dropped 9.2% amid travel concerns, and Dollar Tree slid 11.3% as consumer financial pressure mounted. Even AI-driven tech giants like Nvidia and Palantir suffered steep losses.

International stock markets also felt the impact, with Europe’s CAC 40 and Germany’s DAX falling over 2%, while Japan’s Nikkei 225 and Hong Kong’s Hang Seng posted similar declines. With uncertainty gripping financial markets, investors will closely watch whether Trump’s tariffs signal a strategic move or a lasting economic shift.

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