A stock market turbulent after the entry into force of high tariffs
A stock market turbulent after the entry into force of high tariffs
The US futures declined declined, while the stock exchanges in Europe and Asia mostly listed more deeper on Wednesday. This happens after the enormous "Reciprocal" Zölle Trump came into force and considerably disrupt the global trade.
The effects of the new tariffs
These tariffs, the largest in a century, increase massive import taxes, which in some cases are up to 50 %, to dozens of countries. China is an extreme outsider here because it is faced with a US custom of at least 104 %. China threatened to retaliate on Wednesday, which continues to escalate the already harmful trade war.
Current status of the markets
The US futures for the Dow Jones fell by 400 points or 1 %, while the S&P 500 gave up 0.7 %. The Nasdaq Futures recorded a decline of 0.3 %. The S&P 500 is about to slip into the bear market area after it has fallen by almost 20 % within just seven weeks. Should the market close in a bear market, the end of a Bullenmarktes continues.
global worries and recession
Fear has taken investors worldwide, because the tariffs could plunge into a recession this year both the global and the US economy. Companies and consumers would ultimately have to pay the high tariffs, which subsequently leads to slowing down attitudes and consumer expenses.
market developments in Asia
The Japanese Nikkei fell by 4 %, while the Hong Kong Hang Seng was slightly higher after recording a dramatic decline of 13 % on Monday, the largest daily decline since the Asia Finance crisis 1997. from a recent high. This happened after South Korea warned an emergency package of $ 1.3 billion for its auto industry to cushion the effects of tariffs.
price development in raw materials
In the meantime, the oil price in the United States fell 4.4 % to less than $ 57 per barrel, while the global benchmark Brent oil fell close to $ 60 per barrel-the lowest values have been afraid since February 2021. Investors fear that a global recession could affect the demand for travel, transport and shipping, since all of this requires. Instead, the funds of investors flow into safe ports such as gold, whose spot prices were added by 2 %.
Development of the bond markets
The returns for US state bonds have increased in the past few days, as investors have sold bonds. The benchmark return for 10-year bonds is now 4.4 %, an increase of 0.1 percentage points since the Tuesday closing. Usually investors invest in long -term government bonds in times of crisis in the hope that the current market problems will solve in the long run. However, similar to the stock market, the bond market is affected by extreme volatility, and some investors are looking for exit strategies.Volatility and future outlook
The CBOE volatility index, also known as "Vix", rose 8 % over 50 on Wednesday, a level that was only exceeded in the early phases of Covid pandemic and during the 2008-2009 financial crisis. The VIX is a well -known measure of the market feeling and shows the expected price fluctuations in the S&P 500 over the next 30 days. This extreme uncertainty has led to great fluctuations in the market, as it became clear on Monday and Tuesday.
"The USA and China are now in a trade war without currently showing signs of a de -escalation," said Susannah Street from Hargreaves Lansdown. The markets seem to be extremely unsettled by uncertainty, which leads to significant price fluctuations.