New York, April 5 (RHC)-- Global financial markets have been plunged into turmoil as US President Donald Trump’s escalating trade war knocked trillions of dollars off the value of the world’s biggest companies and heightened fears of a U.S. recession.
The Financial Times calculated that Trump’s most recent announcement of global tariffs has wiped just shy of an estimated $2.5 trillion off the total value of U.S. stock markets in the space of a few hours.
This came as markets reacted to the U.S president’s “liberation day” tariff policies demolishing the international trading order; about $2.5 trillion was wiped off Wall Street and share prices in other financial centers across the globe.
On Thursday, the S&P 500 fell a total 4.8 percent - that equated to a total market value wipeout of $2.48 trillion. That’s not the end of the tough-to-read numbers though, with the Dow Industrial index dropping almost four percent and the Nasdaq dropping very close to six percent.
While it’s important to note that’s not an additional trillion on top of the two already mentioned - there’s an overlap of companies across indices - it’s still indicative of the pressures that White House policy will come under if the bleeding isn’t stemmed soon.
Chip-related companies fell almost ten percent as a group. Amazon lost almost $200 billion in market capitalization value alone.
The Vix index, also known as the fear index, has risen 60 percent in under a week, highlighting the prospect of greater volatility ahead. The U.S. dollar also hit a six-month low, falling 2.2% on Thursday morning, amid a growing loss of confidence in a currency previously considered the safest in the world for most of the past century.
Over the last nearly 24 hours, Trump has faced widespread backlash from U.S. lawmakers and global leaders over his tariffs plan. World leaders from Brussels to Beijing strongly criticize Trump. China condemned “unilateral bullying” practices and the EU said it was drawing up countermeasures.
Economists said Trump’s measures would raise the average tariff, or border tax, charged by the U.S. to the highest level since 1933, in a development that threatened to sink the U.S. into recession while increasing living costs for consumers.
Countries scrambled to assess the fallout and whether to retaliate. The UK, a close U.S. ally that was hit with the lowest level of 10% tariffs, suggested it may retaliate even as it tries to strike a deal with Washington. It published a 417-page list of U.S. products on which it could impose tariffs.
U.S. stocks crashed again on Friday as it looks increasingly likely that Trump's tariffs will cause a global recession. It came after China imposed fresh tariffs on all U.S. goods in response to Trump's sweeping levies, escalating a global trade war. China's finance ministry said it would impose additional tariffs of 34 percent on all U.S. goods from April 10 after Trump raised tariff barriers to their highest level in more than a century this week.
For the second day in a row, trillions of dollars were wiped off the value of U.S. stocks — a blow that will also hit ordinary Americans whose retirement savings, including 401(K), are tied to the market.
That follows Thursday's losses for the three major U.S. indices, which ranged between 4 percent and 6 percent. Thursday's wipeout was Wall Street's worst day in five years.
The tariffs have sent shockwaves through global financial markets, raising fears of a worldwide economic downturn and sharp price hikes across sectors in the world's biggest consumer market. The measures he announced late Wednesday were steeper and more aggressive than expected, hitting industries like pharmaceuticals and microchips.
Markets took little comfort from President Trump's willingness to negotiate over the tariffs. U.S. Secretary of State Marco Rubio acknowledged and admitted that "markets are crashing," but pushed back on fears of a broader economic collapse.
[ SOURCE: PRESS TV and NEWS AGENCIES ]
