From Yahoo Finance: 2025-04-02 01:11:00

President Trump’s new tariffs caused market turmoil, hitting the dollar and U.S. stocks hard. The fear of a global recession due to a broadening trade war led to a 3.4% slide in Nasdaq futures and a jump in bond yields, signaling deep discomfort in the world’s largest consumer market.

The tariffs imposed on several trading partners, including a 10% baseline levy, reverse decades of liberalization in global trade. The move sparked concerns of stagflation in the U.S. as investors worry about the impact on inflation and economic growth.

European shares fell due to concerns about tariff-sensitive sectors like retail and luxury. The STOXX 600 dropped 1.7%, and the euro surged over 1.5%. Fed funds futures rallied as investors priced in a higher chance of the Federal Reserve cutting interest rates in response to the tariffs.

The new tariffs, including a 34% tariff on imports from China, took effect, causing the U.S. dollar index to plummet to a six-month low. S&P 500 futures also saw a 3% decline, with companies heavily reliant on overseas revenue facing increased recession risks.

Trump defended the tariffs as a response to unfair trade practices, sparking uncertainty and fears of a trade war. European Union chief Ursula von der Leyen described the tariffs as a blow to the global economy, prompting preparations for countermeasures and potential retaliatory actions from Europe.

The policy volatility has created negative sentiment in markets, leading to slowdowns in capital projects and a nervous outlook for U.S. stocks. With the S&P 500 already in correction territory, investors are wary of the potential impact of escalating trade tensions on the economy and financial markets.

Read more: Markets reel as US tariffs stoke fear of ‘spiral of doom’ for growth