Stock markets and oil prices have taken a significant hit as global tensions rise following US President Donald Trump’s new tariffs. Investors are anxiously watching the unfolding trade war, worried it could usher in a recession.
Market Reactions
On 3 April 2024, the dollar suffered its steepest drop in ten years, plummeting by as much as 2.6% against the euro. The Nasdaq Composite tumbled around 6%, experiencing its largest single-day loss since 2020. Apparel giants like Nike and Gap saw their shares sink, with Nike down by over 11% and Gap falling more than 20%.
- Apple’s stock dropped over 9%, reflecting concerns about production linked to tariffs.
- Automotive firms were not spared; Stellantis shares fell 7.5% amid production halts related to tariff impacts.
- Oil prices witnessed a significant decline, falling over 6% as fears of an economic downturn set in.
Global Impact
The tariffs, which include a staggering 34% on China and 20% on the European Union, have shaken investor confidence. Markets worldwide reacted swiftly, with Japan’s Nikkei briefly dropping over 4% and European exchanges finishing with losses exceeding 3%.
Key tariff details:
- 34% tariff on China
- 20% on the EU
- 24% on Japan
- 10% baseline tariff on other nations, including the UK
Future Implications
Analysts suggest these tariff measures could lead the Federal Reserve to consider additional rate cuts to mitigate potential recession impacts. White House Press Secretary Karoline Leavitt indicated that Trump is not in a negotiating mood, but there are hints from global leaders for possible dialogue, particularly from Chinese authorities who want countermeasures to be discussed.
Oil Prices in Flux
As oil prices dipped, concerns about future demand paired with growing inventories further complicated the market landscape. Brent crude futures closed at US$74.95 per barrel, while US West Texas Intermediate showed a similar trend.
It seems the markets are echoing a general sentiment of uncertainty — or as they say in Singapore, lah, it’s a bit of a rollercoaster, isn’t it?