Global stocks fall as worries rise over tariffs and US economy

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Global stocks fall as worries rise over tariffs and US economy

Stocks fall following Trump’s latest trade threats, as well as the weakness of tech stocks.

Global stock markets dropped on Friday after Donald Trump’s latest threats to impose tariffs added further pressure to markets already suffering after a massive tech-related sell-off on Wall Street.

The large Stoxx Europe 600 fell 0.6 per cent on the first day of trading, aided by the 0.9 per cent decline in Germany’s export-driven Dax as well as a 0.6 per cent drop in France’s Cac 40 index, which is the benchmark Cac 40 index.

Markets declined across Asid Japan’s Nikkei index 225 lost 2.9 per cent while South Korea’s Kospifellg 3.4 per cent, as well as Hong Hong Kong’s Hang Seng index, tumbled 3.3 per cent China’s mainland CSI 300 benchmark lost 2 per cent.

The market’s declines came on the heels of a turbulent day for US markets, as tech stocks slowed in a Nasdaq Composite closing down 2.8 per cent as well as the S&P 500 finishing 1.6 per cent lower, losing gains from the previous year.

“The past few days have been very difficult for investors from a variety of sectors . . . Trump’s tariff announcement has shaken an already fragile economy” added Mohit Kumar Analyst at Jefferies.

Investors were stunned today by the latest trade scud from Trump who declared that the US president will put additional tariffs of an additional 10% tax on Chinese imports and move forward with levies against Canada and Mexico beginning on March 4.

Despite the flurry of threats since he took office in March, Trump has only imposed 10% tariffs on Chinese imports. However, there are indications that the threat of a trade war has shattered confidence among consumers in the US the world’s most populous economy.

In August, confidence fell by the highest level ever since August 20, as per a Conference Board Consumer Confidence Index that was released this week.

Concerns about the state of the economy heightened the investor’s concerns about valuations in the booming tech industry.

Watch These Nvidia Stock Price Levels With Earnings Report Set for Release Wednesday

Chipmaker Nvidia was the biggest winner from the enthusiasm of investors for artificial intelligence in the past two years declined 8.4 per cent following its fourth-quarter earnings exceeded the expectations of analysts, but it failed to spark an overall market rally.

Nvidia hasn’t been the energizing force the company was to US stocks over the last two years with its spectacular quarterly earnings often driving the overall market up.

“Nvidia didn’t save the world,” said Mike Zigmont, co-head of trading at Visdom Investment Group. “The results were great but not so mind-blowingly great that everyone wants to buy more stocks.”

Dutch chipmaking equipment manufacturer ASML was down 3.2 per cent in the early trading on Friday as tech-related problems spread to Europe.

The election of Donald Trump in November pushed US stocks higher, fueled by the hope that the new administration wwouldimplementfavourablee economic policies for business, however in reality, the S&P 500 has slipped in recent weeks, as the focus is the possibility of dangers for the US economy.

The retail investors who have often bought stocks when the market is down are now stricken with “unease”, according to VandaTrack an information company that tracks retail trading flows.

“I believe to a degree this is an appropriate correction. There’s some profit-taking,” said Winnie Wu the Equity strategist with Bank of America. “The market always tries to price a five-year story in five days or five weeks.”

The decline in the more risky investments has hit crypto very hard in recent times. On the last trading day, Bitcoin dropped 5 per cent and Ethereum dropped 6.6 per cent.

The dollar gained 0.1 percent against an array of currencies used by trading partners which added to Thursday’s 0.8 percent increase.

Conclusion

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