Global Stocks Under Pressure as Trump’s Tariff Threats Intensify
Market Sentiment Remains Resilient Despite Uncertainty
New York: Global stocks were under pressure on Wednesday, with European bourses lower, as US President Donald Trump broadened his tariff threats. Despite this, the S&P 500 notched a fresh record.
Tariff Threats Weigh on European Markets
Trump’s warning yesterday to impose tariffs "in the neighborhood of 25 percent" on auto imports and a similar amount or higher on semiconductors and pharmaceuticals has driven European carmakers lower, with Mercedes-Benz, BMW, and VW losing ground, said Joshua Mahony, chief market analyst at Scope Markets.
European markets all dropped, with London hit by higher-than-expected inflation figures. Tariff threats also knocked auto firms and semiconductor manufacturers in Tokyo, dragging the index into the red.
Wall Street Indices Veer In and Out of Negative Territory
Wall Street indices veered in and out of negative territory throughout the session before finishing higher. The S&P 500 rose 0.2 percent to its second straight closing high.
China Warns of Inflation, Market Distortions, and Global Recession
China, a key target in Trump’s tariffs policy, told the World Trade Organization on Tuesday that the United States risked triggering inflation, market distortions, and even a global recession.
Asian Markets Struggle for Direction
Asian markets struggled for direction, with Hong Kong dragged lower by tech firms after Chinese internet giant Baidu’s fourth-quarter earnings saw a fall in revenue and a warning of near-term pressures. The sector has helped the Hang Seng Index surge around 15 percent since the turn of the year, spurred by the emergence of Chinese startup DeepSeek’s new chatbot that has upended the AI universe.
Company News
Swiss mining and commodity trading giant Glencore dropped more than six percent on London’s FTSE 100 after it reported a net loss for 2024. Shares in Dutch medical device maker Philips dropped more than 11 percent on the Amsterdam stock exchange after it posted worse-than-expected losses.
Key Figures
- New York – Dow: UP 0.2 percent at 44,627.59 (close)
- New York – S&P 500: UP 0.2 percent at 6,144.15 (close)
- New York – Nasdaq Composite: UP 0.1 percent at 20,056.25 (close)
- London – FTSE 100: DOWN 0.6 percent at 8,712.53 (close)
- Paris – CAC 40: DOWN 1.2 percent at 8,110.54 (close)
- Frankfurt – DAX: DOWN 1.8 percent at 22,433.63 (close)
- Tokyo – Nikkei 225: DOWN 0.3 percent at 39,164.61 (close)
- Hong Kong – Hang Seng Index: DOWN 0.1 percent at 22,944.24 (close)
- Shanghai – Composite: UP 0.8 percent at 3,351.54 (close)
- Euro/dollar: DOWN at $1.0428 from $1.0446 on Tuesday
- Pound/dollar: DOWN at $1.2582 from $1.2613
- Dollar/yen: DOWN at 151.40 from 152.06 yen
- Euro/pound: FLAT at 82.81 pence
- West Texas Intermediate: UP 0.6 percent at $72.25 per barrel
- Brent North Sea Crude: UP 0.3 percent at $76.04 per barrel
Conclusion
Despite the challenges posed by Trump’s tariff threats, the resilience of the market remains encouraging, adding confidence to the continuation of its upward trajectory. As the situation continues to unfold, investors will be closely monitoring developments and adjusting their strategies accordingly.
FAQs
- What are the implications of Trump’s tariff threats on global markets?
Trump’s tariff threats have sent shockwaves through global markets, causing uncertainty and volatility. - What is the impact of Trump’s tariffs on European carmakers?
European carmakers, such as Mercedes-Benz, BMW, and VW, have been negatively affected by Trump’s tariff threats. - How has the market reacted to Trump’s tariff threats?
The S&P 500 has notched a fresh record, while European markets have dropped, with London hit by higher-than-expected inflation figures.