U.S. stock markets experienced a downturn on Thursday as President Donald Trump unveiled a significant shift in trade policy, implementing a 90-day suspension of substantial tariffs for multiple nations while simultaneously escalating duties on China to a staggering 125%. By 10:10 AM Eastern Time, major indices reflected this negativity: the S&P 500 plummeted by 3%, the Dow Jones Industrial Average dropped 2.4%, and the Nasdaq Composite saw a decline of 3.7%.
Market Reaction to Trade Policy Changes
At the market’s opening, the Dow Jones Industrial Average plunged by 611.5 points, translating to a 1.51% decrease, settling at 39,996.93. The S&P 500 experienced a fall of 103.7 points, or 1.90%, reaching 5,353.15, while the Nasdaq Composite dropped 489.5 points, equating to a 2.86% decline, landing at 16,635.45.
This downturn comes on the heels of President Trump’s announcement, made on Wednesday, where he proposed a temporary reduction in tariffs across various countries. However, this relief was overshadowed by the drastic increase in tariffs on Chinese goods, driven by Beijing’s recent decision to impose an 84% levy on U.S. exports.
Precious Metals Surge Amid Trade Tensions
As the trade conflict escalates, the price of gold surged on Thursday, reflecting investors’ anxieties. The spot price of gold rose by 1.3%, reaching $3,122.02 per ounce by 11:29 GMT, while U.S. gold futures climbed 1.9% to $3,137.80.
In contrast, other precious metals saw mixed results:
- Spot silver dipped 0.6% to $30.85 per ounce
- Platinum declined by 0.4%, settling at $933.55
- Palladium dropped 1.7%, landing at $915.68
Federal Reserve’s Concerns Over Economic Outlook
The latest minutes from the U.S. Federal Reserve revealed that officials are largely in agreement about the dual challenges facing the economy: rising inflation coupled with a slowdown in growth. Some members expressed concerns regarding the “difficult trade-offs” that may be necessary for the central bank moving forward.
Conclusion
As the trade war intensifies and economic uncertainties loom, investors are closely monitoring market fluctuations. With rising tariffs and uncertain economic indicators, the landscape remains volatile. This backdrop emphasizes the importance of staying informed about ongoing developments in U.S.-China trade relations and their broader implications for the market.
For more insights on market trends and economic forecasts, check out our comprehensive financial analysis.
