Following an initial surge, US stocks closed significantly lower as the White House confirmed President Donald Trump’s intention to impose tariffs on China exceeding 100 per cent. The S&P 500 index ended the day down 1.6 per cent, a stark contrast to its earlier 4.1 per cent gain. The Nasdaq Composite also experienced a decline of over 2 per cent.
This latest market turbulence comes after Trump’s announcement last week of imposing hefty tariffs on multiple countries, sparking fears of a potential trade war. On Tuesday, the White House announced that additional 50 per cent tariffs on Chinese goods would be implemented, bringing the total duties to over 104 per cent.
While there were initial signals of willingness to negotiate with trading partners to reduce tariffs, conflicting reports emerged throughout the day. Talks with Japan were set to begin, with US Treasury Secretary Scott Bessent highlighting their priority. Trump also hinted at a potential deal with South Korea.
However, tensions between the US and China escalated as Beijing vowed to retaliate if faced with steep tariffs. Trump’s threats of additional tariffs further strained relations between the two nations.
Despite the downturn in US markets, European stocks saw gains, with the Stoxx Europe 600, FTSE 100, and Germany’s Dax all rising around 2.3 per cent. In currency markets, the US dollar weakened against a basket of trading partners.
Oil prices also took a hit, with Brent trading below $62 a barrel and WTI dropping to $58.46 a barrel. US oil prices fell below the breakeven point for many American producers.