Market Impact: Trump’s New Tariffs Bite Stocks While Safe Havens Soar – Your Essential Market Wrap-Up

Market Update: Asia Reacts to New Tariffs

Asian stock markets faced a significant decline following a global selloff. The S&P 500 dropped 1.6% earlier this week, erasing its yearly gains. The Nasdaq 100 fared even worse, falling 2.8%. Technology shares took a hit, especially Nvidia, which plummeted 8.5% after disappointing earnings reports.

From Sydney to Mumbai, investor sentiment soured as concerns grew over President Trump’s new tariffs. He announced a 25% tariff on imports from Canada and Mexico, alongside an additional 10% levy on Chinese goods. This move raised worries about its potential effects on economic growth. Bitcoin, which some see as a risky asset in this environment, also dropped sharply.

Jun Rong Yeap, a market strategist, noted that these tariff announcements have caused investors to rethink their strategy. Many are unsure if these tariffs signal serious policy changes or just negotiating tactics.

Treasury yields fell in response, with the 10-year yield dropping to around 4.22%, the lowest since December. This reflects a flight to safer assets as tensions grow between the U.S. and China.

Investment strategist Billy Leung commented on the frustration stemming from ongoing tariff discussions. He believes this uncertainty could lead to market fatigue. However, optimistic sentiments surrounding artificial intelligence in China might keep some investors engaged. All eyes now turn to the upcoming National People’s Congress meeting, which could influence China’s economic trajectory.

Asian markets showed a mixed response to these developments. In Hong Kong, stocks plunged 3%, while technology shares lost around 4.7%. Meanwhile, the Indonesian rupiah hit its lowest point since April 2020, reflecting broader concerns across Asian currencies.

The Federal Reserve’s preferred inflation measure is set to be released soon, with expectations of a cooling trend. Economists predict the core personal consumption expenditures (PCE) price index will show a 2.6% increase year-over-year.

In commodity markets, oil prices are on track for monthly losses, and gold is facing its first weekly decline of the year. Investors remain wary amidst all the uncertainty.

Key upcoming events include:

• U.S. PCE inflation, income, and spending report on Friday
• Fed’s Austan Goolsbee speaks on Friday

Some notable market moves include:

• S&P 500 futures showed little change as of Tokyo time.
• S&P/ASX 200 futures dropped 1.4%.
• Japan’s Topix fell by 2%.
• Hong Kong’s Hang Seng decreased by 2.7%.
• Shanghai Composite declined by 1.2%.
• Euro Stoxx 50 futures fell by 1.1%.

Currency updates reveal the Bloomberg Dollar Spot Index held steady. The euro remained around $1.0389, while the yen strengthened slightly against the dollar to 149.64. Bitcoin fell 5.6% to about $79,597, and Ether dropped 7.5% to approximately $2,109. Additionally, West Texas Intermediate crude dipped 0.5% to $69.97, and spot gold fell to $2,864.01 an ounce.

As market conditions change rapidly, staying informed is key to navigating these fluctuations effectively.

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Donald Trump, Bloomberg, Chinese imports, Treasury yields, Charu Chanana, technology shares, dollar strength