Global Markets Plunge as Trump Threatens European Countries with Tariffs Over Greenland Dispute
Stocks plummeted on Tuesday as President Trump announced plans to impose new tariffs on eight European countries, escalating tensions over his attempts to assert American control over Greenland. The losses were widespread, with nearly every sector losing ground, and major indexes in the U.S. extending losses from last week in what has been a wobbly start to the year.
Market Performance
The Standard & Poor’s 500 fell 143.15 points, or 2.1%, to 6,796.86, marking the steepest drop for the benchmark index since October. The Dow Jones industrial average fell 870.74 points, or 1.8%, to 48,488.59, while the Nasdaq composite fell 561.07 points, or 2.4%, to 22,954.32. Technology stocks, including Nvidia and Apple, were among the heaviest weights on the market, with Nvidia plunging 4.4% and Apple falling 3.5%.
Retailers, banks, and industrial companies also fell sharply, with Lowe’s falling 3.3%, JPMorgan Chase falling 3.1%, and Caterpillar losing 2.5%. European markets and markets in Asia also declined, with long-term bond yields in Japan rising to record levels on concerns over the government’s fiscal policy, adding to anxiety in global markets.
Trade Tensions and Geopolitical Uncertainty
Trump’s trade policy has been a major factor in market volatility since the start of his second term, with stocks selling off on the threat of steep tariffs and then rallying when Trump delays or cancels a tariff. The latest threat of a 10% import tax on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland has reignited concerns over trade tensions and geopolitical uncertainty.
Gold prices surged 3.7% and silver prices soared 6.9% as investors sought safe-haven assets in times of turmoil. The trade tensions also appear to have short-circuited a recent rally in bitcoin, which rose above $96,000 late last week but has since dropped back to around $89,700.
Economic Implications and Market Outlook
The threat of tariffs poses a risk to inflation, which could further complicate the Federal Reserve’s job. The central bank has taken a cautious view due to the risk of rising inflation, which remains above its target of 2%. The Fed will meet next week for its policy meeting on interest rates, and Wall Street is betting that the central bank will hold its benchmark interest rate steady.
Companies that focus on consumer staples, such as Colgate-Palmolive and Campbell’s, held up better than most of the market, rising 1.1% and 1.5%, respectively. The price of U.S. crude oil rose 1.5% to $60.34 per barrel, while the price of Brent crude, the international standard, rose 1.5% to $64.92.
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Image Source: www.latimes.com
