Tariff Turmoil Shakes Wall Street and Global Markets | Image Source: www.nbcnews.com
New York, April 10, 2025 – What a difference it makes a day – or in this case, a week. Investors, business leaders and ordinary consumers continue to withdraw from one of the most chaotic sections of modern financial history, triggered by a new aggressive wave of tariffs triggered by the White House. From Wall Street to global seaports, the impact is immediate, the mood is uncomfortable and the road to follow is a little less safe.
What triggered the last deal?
At the heart of the current economic storm is President Donald Trump’s decision to impose a 145% tariff on Chinese imports, clarified by the White House last Thursday. This measure has already been subject to a 20% tariff, which has increased the financial burden on importers and raised red flags in the economic sectors.
The Dow Jones Industry The average agitated over 1000 points on Thursday, a star investment after almost 3000 profit points the day before. Slamp; P 500 fell by 3.46%, and Nasdaq technology slipped by 4.31%, splashing the historic rally of the day before - the best of S Pulamp; P since 2008 and Nasdaq’s second best in the record. Investors are confused between ephemeral optimism and deep anxiety.
Why have tariffs caused such a strong reaction?
Prices are not just political tools – they are economic grenades. While Trump has temporarily stopped some of the “reciprocal” tariffs that affect dozens of countries, the trade war with China has only increased. Beijing responded with 125% of retaliatory rights on US goods, a point-by-point movement that left economists and investors afraid of prolonged damage to global supply chains.
According to JPMorgan and Goldman Sachs, even the temporary decline in certain tariffs does not cancel the greater economic damage. JPMorgan estimates a 60% probability of a US recession, and Goldman Sachs still sees the odds in a currency exchange. According to Joe Brusuelas, Chief Economist of the RSM, repulsion could only delay economic pain:
“All this is temporarily postponed, which will probably be a series of punitive import taxes imposed on American trade allies. “
What are the more general economic indicators they tell us?
Signs of stress appear beyond the stock market. The U.S. dollar index fell by 1.7 per cent, reaching its lowest level since early October. Gold, a traditional refuge, sown at a record above $3,170 per ounce of troy. Meanwhile, bond markets remain volatile, with a 10-year Treasury yield exceeding 4.3%, indicating that investors are tackling uncertainty rather than betting on growth.
The price of oil is also beating. U.S. crude fell below $60 per barrel, while Brent crude fell from 4% to approximately $63 per barrel, levels that have not been observed since early 2021. ING analysts have noted that markets will not easily forget the ”global market blows”, even if the most punitive tariffs are stopped.
Is inflation still worrying?
Interestingly, last week’s inflation data showed signs of deceleration. Inflation in March cooled at an annual rate of 2.4%, and wholesale prices fell unexpectedly. But analysts quickly reduced relief. As Skyler Weinand of Regan Capital explains, the data are late:
“He doesn’t tell the market much about how recent tariffs, although a lot on a break, affect consumer prices. “
In practice, tariffs on a wide range of imports, from automotive and electronic parts to basic foodstuffs such as coffee and molluscs, are expected to increase prices in the coming months. As Barclays analysts have pointed out, many consumers rushed to buy goods in March before the first walks, with the stop traffic of the warehouse club jumping almost 10% in the last week of the month.
How do businesses and investors react?
Reactions vary, but most highlight a common problem: anxiety. Managing Director of BlackRock Larry Fink told CNBC that the U.S. economy is “very close, if not in recession.” Jamie Dimon of JPMorgan echoed this sentiment, saying that “the economy is facing considerable turbulence,” even when the bank has strong commercial revenues.
On Wall Street, the CBOE’s volatility rate – often referred to as the “fearful environment” in the market – increased by 40% on Thursday, increasing briefly above 50 points. It is a level historically associated with volatility at the level of the crisis. At the same time, the consumer sentiment index at the University of Michigan fell by 11%, reflecting growing household concerns about inflation, income prospects and employment stability.
How does this affect the stock market outlook of 2025?
Due to price uncertainty, it is almost impossible for peg investors to have a reliable value for shares. Analysts cannot agree on any of the two key measures that determine the scores: the projected income or the price of multiple income (P/E).
At present, income projections for 2025 vary wildly:
-
- $267: up 10% (current consensus)
- $242: no growth
- $193: down 20% (recessionary)
Similarly, the projected P/E ranges from a bullish 19 to a prudent 14, the latter generally seen in recessions. Depending on the combination of income and multiple, Slamp; P 500 could be between 5,363 and 3,200 – a jaw cutting variance.
As LSEG data illustrate, even a moderately pessimistic perspective - for example, flat profits and a multiple of 17 – decreases the S-minus stamp; P to 4.114, a sharp fall in current levels. A factor in income decline and multiple recruitment, and the index could fall to levels last observed during the 2020 pandemic.
What are the global implications of trade war?
International markets have responded with a mix of anxiety and resilience. Asian shares, with Nikkei 225 from Japan up to 9%, South Korean Kospi up to 6.6%, and Taiwan Taiex over 9.3%. In Europe, where retaliatory tariffs were stopped, rates also increased: Germany DAX jumped 4.5%, France CAC increased 3.8% and the London 100 FTSE increased 3%.
The President of the European Commission, Ursula von der Leyen, welcomed Trump’s tariff break and called it “an important step towards the stabilisation of the world economy”. But few expect lasting calm if the United States and China fail to reach a full agreement.
What’s next for the US-China trade relationship?
As things stand, Trump’s 145% tariff on China remains in effect. Beijing’s answer? “The door to talks is open,” but it must be based on mutual respect and equality. The Chinese Ministry of Trade has warned that threats and pressure tactics are unacceptable, noting that negotiations will be somewhat less harmonious.
Tesla stopped ordering two models manufactured by the United States in China, an early example of how corporate strategy can change in a context of growing trade tensions. The longer the impasse continues, the more likely it will be for companies to adjust global supply chains, a costly and long-term process.
Despite temporary relief in some sectors, the main concern remains: trade policy has become a moving objective. With daily policy change, confidence in the stability of world trade is eroded. Investors, managers and consumers are trapped in the crossfire, waiting for tariff fog to dissipate before lasting damage is caused.
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