Market Turmoil as Trade-War Fears Escalate
US Stocks Resume Their Decline
On Monday, US stocks took a significant hit, continuing their downward trend as concerns over impending trade-war tensions grew. The Nasdaq Composite led the plunge as the tech-heavy index fell by 1.7%, reaching a six-month low. The S&P 500 also experienced a downturn, initially dropping to its lowest since September but later showed signs of recovery, settling at a 0.7% decline. Conversely, the Dow Jones Industrial Average managed to curb its early losses, finishing up by 0.1%.
Impact on Major Tech Stocks
The tech sector bore the brunt of the sell-off, with prominent names such as Nvidia, Tesla, Meta, and Amazon showing significant declines:
- Nvidia (NVDA) fell approximately 5%
- Tesla (TSLA) decreased by over 5%
- Meta (META) and Amazon (AMZN) also declined
Trump’s Tariff Announcement Looms
Investors are bracing for further turbulence as President Trump is set to unveil an extensive array of tariffs this week, referred to by him as “Liberation Day”. These tariffs are expected to intensify, impacting all countries under a policy of reciprocal tariffs. This has led to apprehension among market participants about the broader implications for global trade and the US economy.
Gold Climbs to Record Highs
As a response to market volatility, the price of gold soared, breaching the $3,100 mark for the first time, as investors flocked to the perceived safety of the precious metal amid escalating geopolitical and economic risks.
Gold’s upward momentum is further bolstered by predictions from major financial institutions:
- Goldman Sachs projects a year-end target of $3,300 per ounce
- Bank of America anticipates gold reaching $3,500 per ounce within the next 18 months
Reactions Across Global Markets
The ripple effects of these developments have been felt across international markets. The Nikkei 225 in Japan entered correction territory amid growing tariffs concerns, while European markets showed similar signs of distress.
Wall Street Strategies Amid Market Stress
Wall Street strategists are adjusting their outlooks in light of these mounting pressures. Recent actions include:
- Goldman’s chief economist, David Kostin, has reduced his year-end forecast for the S&P 500 to 5,300, a clear signal of caution amid rising uncertainty.
- Recession probability estimates have also been revised higher, highlighting the potential for economic slowdowns fueled by trade tensions.
Outlook and Economic Indicators
This week’s economic calendar features crucial reports, including the core PCE index and the March jobs report, both pivotal in shaping expectations of inflation and economic resilience. These data points could play significant roles in influencing investor sentiments.
Treasury Bonds and Other Safe-Haven Assets
Further signaling market caution, US Treasury bonds surged as investors sought refuge from volatile equity markets. The flight to safer assets underlines the continued investor wariness amid trade policy uncertainties.
Conclusion
Market participants are navigating a challenging landscape, characterized by trade tensions and macroeconomic concerns. As developments unfold, the focus remains on diplomatic efforts and potential policy shifts that can stabilize markets and guide future investment strategies. In the meantime, gold and other safe-haven assets continue to gain appeal as reliable hedges against rising risks.
Source: https://finance.yahoo.com/news/live/stock-market-today-dow-sp-500-nasdaq-futures-tumble-as-liberation-day-worries-trap-investors-234931116.html