Wall Street, Global Markets Fall After Tariffs, Recession Fears Rise/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Markets around the world plunged after President Trump announced sweeping tariffs on imports, sparking fears of a global trade war and economic slowdown. Wall Street futures fell sharply, oil prices dropped, and global stock indexes slipped amid mounting recession risks. Economists warn the aggressive trade move could backfire.
Market Reaction to Trump Tariffs – Quick Looks
- S&P 500 futures fell 3.4%, Nasdaq down 3.8%
- Dow futures dropped 2.8% after tariff announcement
- Trump imposed 10% baseline tariffs, higher on key partners
- China faces total 64% tariff burden including previous duties
- Oil prices dropped over 4% as economic fears grew
- Treasury yields fell sharply, signaling market uncertainty
- Global indexes in Europe and Asia posted major losses
- Stronger yen signals investors’ flight to safe havens
- Economists warn of inflation and recession threats
- Tariffs hit auto imports, tech goods, and raw materials
Wall Street, Global Markets Fall After Tariffs, Recession Fears Rise
Deep Look
Global Markets Sink as Trump’s Sweeping Tariffs Spark Fears of a Widening Trade War
Markets across the globe tumbled Thursday after President Donald Trump announced a sweeping series of tariffs on imports from dozens of countries, triggering sharp selloffs and stoking fears of a global recession.
The U.S. president’s declaration of a 10% baseline tariff on imports from all countries — and sharply higher rates on major trade partners — sent shockwaves through financial markets. Wall Street futures fell steeply before the market open, with S&P 500 futures down 3.4%, the Nasdaq tumbling 3.8%, and Dow futures off by 2.8%.
Markets Rattle on ‘Major Shock’ Announcement
The surprise tariff hike came after markets had already been jittery for several days. Trump’s announcement late Wednesday, calling for a 34% tariff on Chinese goods, 20% on European Union imports, and 32% on products from Taiwan, triggered immediate global concern.
“This was a major shock,” said Yeap Junrong of IG Markets, noting that the cumulative effect of the new China tariffs now totals a 64% burden when previous rounds are included.
While the initial plunge mirrored declines seen earlier this week, Thursday’s selloff appeared more decisive, with little indication of a late-day rebound.
Oil, Dollar, and Treasuries All Move
The broader market turmoil wasn’t limited to equities. Oil prices fell significantly, with U.S. crude shedding $3.36, or 4.7%, to settle at $68.35 per barrel. Brent crude, the global benchmark, dropped $3.29, or 4.4%, to $71.66 per barrel.
The U.S. dollar also weakened, hitting its lowest level against the Japanese yen since early October. The dollar slipped to 146.64 yen, while the euro rose to $1.1080 from $1.0855, signaling a move toward safe-haven currencies.
Bond markets reflected the nervous tone as well. The 10-year Treasury yield dropped to as low as 4.04% overnight, before rebounding slightly to 4.11% by morning — down sharply from 4.80% earlier this year.
Global Markets Fall in Unison
The impact of the tariffs was felt across all major markets. In Asia, Japan’s Nikkei 225 closed down 2.8% after dipping as much as 4% during the session. The Hang Seng in Hong Kong dropped 1.7%, and China’s Shanghai Composite slipped 0.2%.
South Korea’s Kospi fell 1.1% after being hit with a 25% tariff, and Australia’s ASX 200 declined 0.9%. Thailand’s SET index shed 1.1% following the announcement of a steep 36% tariff on Thai exports to the U.S., which analysts say could slash the country’s exports by up to $8 billion.
European markets were also hit hard. Germany’s DAX dropped 2.4%, France’s CAC 40 slid 2.7%, and the UK’s FTSE 100 lost 1.5% by midday.
Tariffs Aim to Reshape Global Trade—But at What Cost?
President Trump defended the sweeping trade action, stating it would force fairer treatment for U.S. producers and bring manufacturing jobs back to the United States. He has argued that foreign nations, particularly those with trade surpluses, have taken advantage of the U.S. for too long.
“We’re done being taken for granted,” Trump said Wednesday, positioning the tariffs as a key step in reshaping global trade dynamics.
But many economists say the plan could have the opposite effect. Tariffs, they argue, threaten to slow global growth, increase costs for U.S. consumers, and stoke inflation at a time when price pressures remain stubbornly high.
“The fear is that the burgeoning trade war will come back to haunt the U.S.,” said BMO Capital Markets economists Sal Guatieri and Jennifer Lee in a client note. “Commodity prices, including oil and even gold, are down on concerns this escalation could harm the entire global economy.”
Chipmakers, Automakers, and Tech in Crosshairs
Among the hardest-hit industries are semiconductors and automakers. Taiwan, a major exporter of computer chips, faces a 32% tariff, raising concerns over global tech supply chains. The earlier 25% tariffs on auto imports are now compounded by additional duties on steel, aluminum, pharmaceuticals, lumber, and copper.
The rising cost of imported goods also threatens to weigh on U.S. businesses that rely on global supply chains for raw materials and components. Analysts warn that American households could soon feel the pinch through higher prices on cars, groceries, and consumer electronics.
Outlook Remains Uncertain
While some Asian investors hope Beijing will announce further stimulus measures to soften the blow, many analysts agree that Trump’s trade offensive increases the odds of a global downturn.
“This is a full-scale macro disruption,” said Stephen Innes of SPI Asset Management. “The speed and breadth of these tariffs caught markets off guard and could have lasting economic consequences.”
As the dust settles from Trump’s “Liberation Day” policy rollout, markets and global leaders now brace for potential retaliatory measures and further volatility.
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