Cliff Notes – Stock markets down ahead of Trump‘s ‘Liberation Day’
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Global stock markets, including the S&P 500 and Nasdaq, experienced declines as investors await imminent tariff announcements from President Trump, reflecting broader economic uncertainties.
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Gold prices surged to $3,150 per ounce, indicating heightened investor caution amid escalating trade tensions and potential tariffs averaging 15% on imports.
- Trump acknowledged the possibility of a recession in a recent interview, compounding market fears as the US government plans extensive new tariffs affecting all countries, not just those with significant trade imbalances.
Stock markets down ahead of Trump’s ‘Liberation Day’
World stock markets were in negative territory on Monday ahead of US President Donald Trump’s so-called “Liberation Day,” or Wednesday, when the latest tariff announcements are expected.
The S&P 500 dropped 0.5% while the Nasdaq fell 1.4% as investors shunned riskier assets, with the US indices reflecting global downward trends ahead of Trump’s expected announcement.
The price of gold meanwhile reached $3,150 per ounce (€2,912 per ounce) and was tracking towards another record high, reflecting the growing economic uncertainties and escalating trade tensions.
In Japan, the Nikkei 225 index dropped 4%, South Korea’s Kospi sank 3%, and France’s CAC 40 fell 1.5%.
What can be expected on Wednesday
It is not completely clear what the US government is planning on what Trump has dubbed “Liberation Day” but on Wednesday, the US is set to begin “reciprocal” tariffs which some economists predict could average at 15%.
Trump on Sunday warned that tariffs would include “all countries” and not just those with the largest trade imbalances with the US, compounding investor fears.
The White House has projected that tariffs for foreign goods will generate an additional $100 billion (€92.7 billion) in revenue for the US government.
Trump not ruling out possible recession
Trump said he did not discount the possibility of a recession in a Sunday interview with Fox News also likely contributed to the sharp market selloff seen on Monday.
On the question of whether he expected a recession this year, Trump said: “I hate to predict things like that. There is a period of transition because what we’re doing is very big… It takes a little time.”
The import taxes that Trump has threatened this time around eclipse the duties put in place during his first term.
Trump has placed 20% duties on imports from China and threatened to impose 25% tariffs on all imports from Canada and Mexico.
Trump also says the US will place reciprocal tariffs on all countries that have tariffs on US exports, including Europe, India, and Japan.
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Additional sources
Dow and S&P 500 close up, Nasdaq falls as Trump’s ‘Liberation Day’ tariffs loom – ABC News
US stock market dips days before Trump’s new tariffs take effect – BBC News
Global stock markets fall as new Trump tariffs loom – The Guardian
Stocks finish higher after earlier losses as markets await Trump’s tariff announcement – NBC News