Connect with us

Business

Markets plunge as Trump tariffs deliver shock waves to world economy

Published

on

PRO122

US President Donald Trump appears on a television screen at the stock market in Frankfurt, Germany, Wednesday, April 2, 2025. (AP)

NEW YORK, April 3, (AP): Financial markets around the world are reeling Thursday following President Donald Trump’s latest and most severe volley of tariffs, and the US stock market may be taking the worst of it.

The S&P 500 was down 3.3% in early trading, worse than the drops for other major stock markets. The Dow Jones Industrial Average was down 1,160 points, or 2.7%, as of 9:32 a.m. Eastern time, and the Nasdaq composite was 4.5% lower.

Little was spared as fear flared globally about the potentially toxic mix of higher inflation and weakening economic growth that tariffs can create. Prices fell for everything from crude oil to Big Tech stocks to small companies that invest only in U.S. real estate. Even gold, which has hit records recently as investors sought something safer to own, pulled lower. The value of the U.S. dollar also slid against other currencies, including the euro and Canadian dollar.

Investors worldwide knew Trump was going to announce a sweeping set of tariffs late Wednesday, and fears surrounding it had already earlier pulled the S&P 500 10% below its all-time high. But Trump still managed to surprise them with “the worst case scenario for tariffs,” according to Mary Ann Bartels, chief investment officer at Sanctuary Wealth.

Trump announced a minimum tariff of 10% on imports from all countries, with the tax rate running much higher on products from certain countries like China and those from the European Union. It’s “plausible” the tariffs altogether, which would rival levels unseen in roughly a century, could knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5%, according to UBS.

Such a hit would be so frightening that it “makes one’s rational mind regard the possibility of them sticking as low,” according to Bhanu Baweja and other strategists at UBS.

Wall Street had long assumed Trump would use tariffs merely as a tool for negotiations with other countries, rather than as a long-term policy. But Wednesday’s tariff announcement may suggest Trump sees tariffs more as helping to solve an ideological goal – wresting manufacturing jobs back to the United States, for example – than just an opening bet in a poker game.

If Trump follows through on his tariffs, stock prices may need to fall much more than 10% from their all-time high in order to reflect the global recession that could follow, along with the hit to profits that U.S. companies could take because of them.

“Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” said Sean Sun, portfolio manager at Thornburg Investment management, though he sees Trump’s announcement on Wednesday as more of an opening move than an endpoint for policy.

One wild card is that the Federal Reserve could cut interest rates in order to support the economy. That’s what it had been doing late last year. Lower interest rates help by making it easier for U.S. companies and households to borrow and spend.

Yields on Treasurys tumbled in part on rising expectations for coming cuts to rates, along with general fear about the health of the U.S. economy. The yield on the 10-year Treasury fell to 4.03% from 4.20% late Wednesday and from roughly 4.80% in January. That’s a huge move for the bond market.

The Fed may have less freedom to move than it would like, though. While lower rates can goose the economy, they can also push upward on inflation. And worries about inflation are already worsening because of tariffs. The Fed has no good tool to fix what’s called “stagflation,” where the economy stagnates and inflation stays high.

Worries about that worst-case scenario knocked down stocks across industries, leading to drops for three out of every four stocks that make up the S&P 500.

Nike fell 10.7% because so many of its products are made outside the United States. United Airlines lost 9.2% because customers worried about the global economy may not fly as much for business or feel comfortable enough to take vacations. Discount retailer Dollar Tree tumbled 11.3% amid worries that its customers, already squeezed by still-high inflation, may be under even more stress.

Some of the heaviest weights on the market were those that had soared earlier in Wall Street’s frenzy around artificial-intelligence frenzy. Critics said they were looking the most egregious out of an overall market that was already looking too expensive after their prices ran higher in recent years.

Nvidia sank 5.1% to bring its loss for the year so far to 22%. It had more than doubled last year after more than tripling in 2023. Palantir Technologies, which offers an AI platform for customers, sank 4.1%. Super Micro Computer, which makes servers, lost 8.2%.

In stock markets abroad, indexes fell sharply worldwide. France’s CAC 40 dropped 3.1%, and Germany’s DAX lost 2.4% in Europe.

Japan’s Nikkei 225 dropped 2.8%, Hong Kong’s Hang Seng lost 1.5% and South Korea’s Kospi dropped 0.8%.

Business

World markets mixed, Japan’s shares dip after election leaves Ishiba’s future in doubt

Published

on

By

XEH105

A person stands near an electronic stock board, left top, showing Japan’s Nikkei index at a securities firm on July 22, in Tokyo. The traffic signs read: No Crossing. (AP)

BANGKOK, July 22, (AP): World shares were mixed on Tuesday after U.S. stock indexes inched to more records at the start of a week of profit updates from big U.S. companies. Germany’s DAX lost 0.5% to 24,186.14 and the CAC 40 in Paris gave up 0.4% to 7,768.46. Britain’s FTSE 100 edged 0.1% lower, to 9,009.34. The futures for the S&P 500 and the Dow Jones Industrial Average were virtually unchanged.

In Asian trading, Japan’s benchmark surged and then fell back as it reopened from a holiday Monday following the ruling coalition’s loss of its upper house majority in Sunday’s election. The Nikkei 225 shed 0.1% to 39,774.92. Analysts said the market initially climbed as investors were relieved that Prime Minister Shigeru Ishiba vowed to stay in office despite the setback

. But the election’s outcome has added to political uncertainty and left his government without the heft needed to push through legislation. A breakthrough in trade talks with the US might win Ishiba a reprieve, but so far there’s been scant sign of progress in negotiating away the threat of higher tariffs on Japan’s exports to the US beginning Aug 1.

“Relief may be fleeting. Ishiba’s claim to leadership now rests on political duct tape, and history isn’t on his side. The last three LDP leaders who lost the upper house didn’t last two months,” Stephen Innes of SPI Asset Management said in a commentary. Elsewhere, Hong Kong’s Hang Seng rose 0.4% to 25,082.78, while the Shanghai Composite index advanced 0.6% to 3,581.86.

South Korea’s Kospi sank 1.3% to 3,169.94, with investors concerned over the Aug. 1 deadline for making a deal with U.S. President Donald Trump or facing 25% tariffs on all the country’s exports to the US. Australia’s S&P/ASX 200 added 0.1% to 8,677.20.

India’s Sensex gained 0.1%, while In Thailand, the SET sank 1.1% after the government named Vitai Ratanakorn as the new future governor of the central bank. He is viewed as likely to be less independent than the current governor, raising concerns about the bank’s independence, analysts said. Vitai will replace Sethaput Suthiwartnarueput, when his term as governor ends in September.  

Continue Reading

Business

MEW gets CAPT approval to link external sites, NDCC

Published

on

By

KUWAIT CITY, July 21: The Ministry of Electricity, Water and Renewable Energy has obtained approval from the Central Agency for Public Tenders (CAPT) to issue a tender for linking the external sites of the ministry with the National Data Control Center (NDCC), say sources from the ministry. Sources indicated that this tender is included in the contracts of the ministry for the current fiscal year and are scheduled to be implemented by the Planning, Training and Information Systems Sector. Sources revealed that the tender is for linking the external branches with the data center in the main ministry building and the NDCC in order to allow the exchange of information and provision of electronic services.

Sources pointed out that “subject to the approval of CAPT, the tender will be announced and a date will be set for specialized companies to submit their bids, select the winning bid and implement the project under the regulations.” Sources added the ministry intends to install five main power transformer stations for the Automobile Circuit Project — Rawda Block Three, Kabd C, cow farms, Sharq Block Four and Al- Arabi Club; in addition to supplying and extending the necessary underground cables to feed the five planned stations through two tenders: the first for the stations and the second for the cables. Sources said the two tenders aim to provide the energy needed to expand the high-voltage and ultra- high-voltage electrical networks resulting from the increased demand for electricity in the aforementioned areas, as well as to provide electricity continuously throughout the day. Moreover, the ministry also confirmed the start of electricity connection in Al-Mutlaa Residential City (N1 District – parts of Block One; in cooperation with the Public Authority for Housing Welfare (PAHW). It reiterated that it is now receiving applications to connect electricity to 251 plots

By Mohammad Ghanem
 Al-Seyassah/Arab Times Staff 

Continue Reading

Business

DGCA of Kuwait and Japan Take Off on a New Chapter of Aviation Cooperation

Published

on

By

DGCA of Kuwait and Japan Take Off on a New Chapter of Aviation Cooperation

Chairman of the Kuwaiti Directorate General of Civil Aviation (DGCA) Sheikh Humoud Mubarak Humoud Al-Sabah receives the Japanese Ambassador to Kuwait Kenichiro Mukai

KUWAIT CITY, July 21: Chairman of the Kuwaiti Directorate General of Civil Aviation (DGCA) Sheikh Humoud Mubarak Humoud Al-Jaber Al- Sabah said Sunday that the DGCA looks forward to promoting cooperation with Japan in civil aviation. Sheikh Humoud made the remarks while welcoming Japanese Ambassador to Kuwait Kenichiro Mukai to discuss bilateral cooperation in the field of civil aviation, the DGCA said in a press release. He underlined the importance of deepening the distinguished ties between both friendly countries, praising Japan’s advanced experience in technology and aviation industry, it said. For his part, the Japanese Ambassador expressed his appreciation to the Kuwaiti official for his hospitality, saying that his country is interested in furthering cooperation with the State of Kuwait in aviation, in a way that contributes to exchanging expertise and achieving integration in the fields that concern both sides. (KUNA)

Continue Reading

Trending

Copyright © 2025 SKUWAIT.COM .