Tariffs Trigger Selloff Across U.S. and Global Markets
The U.S. stock market faced another brutal session following President Trump’s sweeping new tariffs, sending shockwaves across equities, bonds, and even global currencies. Despite expectations of protectionist policy, the announcement exceeded worst-case fears, rattling investor confidence and reigniting inflation concerns.
What Happened?
In a surprise move Wednesday evening, Trump announced a minimum 10% tariff on all imports, with steeper rates aimed at specific nations like China and the EU. According to UBS, the economic consequences could be severe, with U.S. GDP potentially dropping by 2% and inflation rising to 5%.
🔻 Many analysts believed tariffs would be used as a negotiation tactic—but this decision signals a long-term ideological shift, prioritizing domestic manufacturing over global trade stability.
“Markets may actually be underreacting… given the potential knock-on effects to global consumption and trade,” said Sean Sun, portfolio manager at Thornburg Investment Management.
Investor Reaction: Risk-Off in Full Force
As investors rushed into safer assets, the 10-Year Treasury yield plunged to 4.03%, signaling fear and a potential Federal Reserve intervention. However, the Fed may be cornered: cutting rates risks fueling even higher inflation.
Stocks That Took the Biggest Hit:
- Nike (NKE): -10.7% 📉 (supply chain exposure)
- Dollar Tree (DLTR): -11.3% 📉 (consumer stress fears)
- United Airlines (UAL): -9.2% 📉 (travel pullback fears)
- Nvidia (NVDA): -5.1% 📉 (AI bubble deflating?)
- Palantir (PLTR): -4.1%
- Super Micro Computer (SMCI): -8.2%
Meanwhile, gold reached new highs, as traders sought safety amid stagflation worries.
Global Markets Join the Selloff
The fear wasn’t isolated to Wall Street. International markets echoed the panic:
- France CAC 40: -3.1%
- Germany DAX: -2.4%
- Japan Nikkei: -2.8%
- Hong Kong Hang Seng: -1.5%
- South Korea Kospi: -0.8%
Final Thoughts
This may be just the beginning of market volatility. If these tariffs stick, analysts warn the S&P 500 could fall far more than the current 10% drawdown. Watch for Fed response, inflation spikes, and reactions from overseas economies. Buckle up.
