A. M. World stock markets plummeted after US President Donald Trump surprisingly announced the imposition of global tariffs on products entering the United States. The measure, more aggressive than anticipated, provoked an immediate reaction in the financial markets and in the value of the dollar.
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The impact was overwhelming: the dollar fell to its lowest level of the year against several currencies, including the euro (-2%) and the japanese yen (-1.5%). Simultaneously, Wall Street’s main indexes suffered significant losses. The Dow Jones fell 3.98%, the S&P 500 fell 4.84% and the technology-heavy Nasdaq fell 5.97%.
The negative investor reaction led to millions of dollars in market capitalization losses. In the two days following the announcement alone, Wall Street lost close to US$6.4 billion, bringing the figure to almost US$10 billion since Trump’s inauguration, according to data from The Wall Street Journal.
All corporate sectors closed in the red, with energy (-8.7%), financials (-7.4%) and technology (-6.3%) being the hardest hit. Companies such as Tesla (-10.4 %), ConocoPhillips (-9.5 %) and JPMorgan (-7.5 %) led some of the biggest falls of the day.
To contain the panic, Trump called on the Federal Reserve to lower interest rates. However, the agency’s chairman, Jerome Powell, refused, warning that tariffs could generate inflation and slow growth. The statement exacerbated pessimism and accelerated the stock market decline.
