Key Takeaways:
- Global markets tumbled after Donald Trump announced new tariffs targeting China and the European Union.
- Stocks fell sharply, with tech giants like Apple and Nike seeing big drops.
- Gold prices soared to a record high as investors sought safer options.
- The dollar weakened against the euro, and Bitcoin also took a hit.
Stocks Take a Hit
Global markets were thrown into chaos after Trump announced new tariffs on imports from China and the European Union. This move sent shockwaves through the financial world, causing stock prices to drop sharply.
By the evening, US stock futures, which predict where markets will open the next day, were down significantly. The Dow Jones fell 2.4%, the Nasdaq dropped 4.2%, and the S&P 500 futures slid 3.5%. These declines were especially sharp in the tech sector, with companies like Apple, Nvidia, and TSMC seeing their shares plunge after hours.
The clothing industry was also hit hard. Brands like Gap, Ralph Lauren, and Nike, which rely on manufacturing in China and Vietnam, saw their stock prices fall by as much as 8.5%. Many of these companies face higher costs due to the new tariffs, and investors are worried about how this will affect their profits.
Safe-Haven Assets Shine
While stocks struggled, investors turned to safer options like gold and government bonds. Gold, often seen as a safe bet during uncertain times, hit a new record high, trading at over $3,160 an ounce. Since the start of 2025, gold prices have jumped by nearly 20%, showing how nervous investors are about the global economy.
The bond market also saw increased demand. The yield on the 10-year US Treasury, a key measure of borrowing costs, dropped to 4.10%. This happens when more investors buy bonds, driving up their prices and lowering their yields.
Dollar Weakens Against the Euro
The dollar took a hit too. Just minutes after Trump’s announcement, the euro gained strength, with one euro worth about 1.09 dollars by the end of the day. This shift could make European imports cheaper for American buyers but may also hurt US exports.
Bitcoin, the popular cryptocurrency, wasn’t spared either. It fell by more than 3% as investors moved away from riskier assets.
What’s Next?
While the tariffs have caused immediate concern, some experts believe this could be the start of negotiations with other countries. If these talks lead to lower tariffs in the future, the impact on markets might ease. For now, though, investors are acting quickly, selling stocks and moving to safer options like gold and bonds.
The global economy is facing a tough road ahead, and Trump’s tariffs are adding fuel to the fire. How this plays out in the coming weeks will be crucial for markets and consumers alike. Stay tuned.