Stocks Rebound after Trump Tariff Announcement
The stock market dropped when Donald Trump declared his new tariff policy for April, but as Thursday trading begins, the market is starting to recover.
The Dow dropped more than 1,000 points on Wednesday following Trump’s tariff announcement that would likely lead to higher prices for automobiles. Trump announced tariffs that were higher than expected, and Nasdaq dropped 3.4% as a result, with the S&P 500 losing 3.1%. However, Thursday morning is seeing a brighter outlook for the market.
The Dow Jones Industrial Average has actually gained 0.56% over the last 24 hours. The S&P 500 is up by 0.67%, and the Nasdaq Composite is climbing marginally as well with a 0.87% gain. These are unexpected increases but do show that the market is more resilient than many analysts have pegged it, and there is hope that stocks will continue to rise in the aftermath of the tariff announcements.
Tariffs to Affect Economy in Significant Ways
Trump’s tariff plan is broad and is likely to impact most markets in some way, with a few being significantly impacted. Vietnam is going to be targeted with a 46% reciprocal tariff under this plan, with China receiving a 34% tariff, and the European Union hit with a 20% tariff. Taiwan is going to ensure a 32% tariff, and according to the White House, these tariffs are only a portion of what these countries have charged the United States.
Many countries are now in a negotiating stage with the U.S., with several promising to retaliate if the negotiations fall through. What this means is that many U.S. industries can expect higher prices to hit in the near future, as many of those negotiations are not likely to lead to significantly lower tariffs.
In February, personal spending in the United States was poorer than anticipated, and that will probably only get worse as the year continues. Citizens who have been polled on the economy say that they are fearful about the economy, inflation, and their personal income. They are not sure how they will be able to continue to afford to pay for basic necessities if the economy worsens. That fear will lead to stock markets being neglected as investors hold back on their unnecessary spending.
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