Wall Street Frissonna and an invisible level of shock since the Covid epidemic tore Thursday in the world Donald Trump The most recent set of price Could save the savings in continents, including its own.
The S&P 500 flowed 4.8%, more than on the main markets through Asia and Europe, for its worst day since the pandemic crushed the economy in 2020. The industrial average of Dow Jones dropped by 1,679 points, or 4%, and the Nasdaq composite dropped by 6%.
In Canada, the S&P / TSX composite index closed 971 points, or 3.8%, because the markets feared that the last American prices would flow the global economy in a recession. Canadian clothing brands, including Aritzia and Lululemon, were one of the companies that saw their courses slides.
In the stock markets abroad, the indices have dropped strongly in the world. The CAC 40 French fell by 3.3% and the German Dax lost 3% in Europe.
The Nikkei 225 of Japan sank 2.8%, the Hang Seng of Hong Kong lost 1.5%and the Kospi of South Korea dropped by 0.8%.
Little was spared in the financial markets while fear evased on the potentially toxic mixture of weakening economic growth and higher inflation that prices can create.
Everything from crude oil to major technological actions to the value of the US dollar against other currencies has dropped. Even Gold, who recently reached records when investors have sought something more sure to have, have decreased. Some of the worst hit the smallest American companies, and the Russell 2000 index of smaller shares dropped by 6.6% to draw more than 20% below its record.
Investors around the world knew that Trump was going to announce a set of radical rates on Wednesday evening, and the fears around him had already withdrawn the main measure of the health of Wall Street, the S&P 500, 10% below its top of all time. But Trump still managed to surprise them with “the worst case for prices”, according to Mary Ann Bartels, director of investments at Sanctuary Wealth.
Trump announced a minimum rate of 10% on imports, the tax rate being much higher on the products of certain countries such as China and those of the European Union. It is “plausible” that prices, which competes with invisible levels in approximately a century, could bring down American economic growth of 2 percentage points this year and increase inflation almost 5%, according to UBS.
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Such a success would be so great that it “made his rational spirit consider the possibility that they remain so low”, according to Bhanu Baweja and other strategists of UBS.
Wall Street had long assumed that Trump would use prices simply as a tool for negotiations with other countries, rather than a long -term policy. But Wednesday’s announcement may suggest that Trump sees the prices more as helping to solve an ideological objective than an opening bet in a poker game. Trump spoke about the retraction of manufacturing jobs in the United States on Wednesday, a process that could take years.
If Trump follows his prices, equity prices may have to lower much more than 10% of their summit of all time in order to reflect the recession that could follow, as well as the profits that US companies could take. The S&P 500 is now down 11.8% compared to its record set in February.
“The markets can in fact be under-relief, especially if these rates prove to be final, given the potential effects of violation of consumption and global trade,” said Sean Sun, portfolio director at Thornburg Investment Management, although he considers Trump’s announcement on Wednesday as more than one opening decision than a final point for politics.
Trump offered an optimistic reaction after he was asked about the drop in the market when he left the White House to go to his Florida golf club on Thursday.
“I think it’s going very well,” he said. “We have an operation, as when a patient is operated and it is a great thing. I said it would be exactly like that.”
A joker is that the federal reserve could reduce interest rates to support the economy. This is what he did at the end of last year before stopping in 2025. Lower interest rates help by facilitating the loan and American households to borrow and spend.
The yields on Treasurys fell partly on the increase in expectations for future reductions, as well as the general fear of the health of the American economy. The yield on the 10 -year treasure fell 4.04%, compared to 4.20% Wednesday evening and around 4.80% in January. This is a huge decision for the bond market.
The Fed may have less the freedom to move than it would like. Although lower rates can brighten up the economy, they can also grow on inflation. And concerns are already aggravated on this subject because of prices, with American households in particular for offender for strong increases in their invoices.
The American economy at the moment is still increasing, of course. On Thursday, a report indicates that fewer American workers asked for unemployment benefits last week. The economist expected an increase in unemployment, and a relatively solid labor market was the Pable de Calefrège to keep the economy outside the recession.
A separate report said that activity for American transport, finance and other companies in the service industry increased last month. But growth was lower than expected, and companies have given a mixed image of how they see the conditions.
The concerns about a potentially stagnated economy and high inflation overthrowing all kinds of stocks, causing drops for four out of five that make up the S&P 500.
Best Buy dropped by 17.8% because the electronics it sells is made worldwide. United Airlines lost 15.6% because customers worrying about the global economy may not take as much for businesses or feel enough to take a vacation. The objective fell 10.9% in the middle of the concerns that its customers, already in a hurry by an inflation still high, can be even more stressed.
All in all, the S&P 500 fell from 274.45 points to 5,396.52 The industrial average of Dow Jones flowed from 1,679.39 to 40,545.93, and the NASDAQ composite released 1,050.44 to 16,550.61.
– With files from Global News’ Ari Rabinovitch and Sean Boynton, and the Canadian Press