Wall Street experienced its steepest decline since the start of the Covid-19 pandemic five years ago, as investors globally hesitated in response to Donald Trump’s audacious attempts to revamp the world economy through extensive US tariffs.
On Friday, the US president reaffirmed his commitment to the plan, claiming he would not waver, despite the Federal Reserve chairman’s warning that it could result in increased prices and a slowdown in economic growth.
The market downturn persisted, with the S&P 500 index plummeting 322 points, or 6%, and the Dow Jones Industrial Average losing 2,231.07 points, equivalent to a 5.2% drop in New York. According to Dow Jones Market Data, the Dow’s two-day decline has erased $6.4 trillion in market value.
In contrast, the tech-heavy Nasdaq Composite fell by 5.8%, entering bear market territory after a more than 20% decline since its peak in December.
During the week, the S&P 500 decreased by 9.1%, marking its worst five-day trading performance since March 2020.
Trump attempted to curb the downturn, but his assertion that his policies “will never change” in a capitalized social media post seemed to deepen concerns regarding his strategies.
“ONLY THE WEAK WILL FAIL!” he proclaimed on Truth Social, his social media platform.
China detailed plans for retaliation, setting the stage for a potential trade war between the world’s two largest economies, while other nations worldwide coordinated their responses.
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The extensive tariff package introduced by Donald Trump on Wednesday features an exemption for the energy sector, reflecting the president’s allegiance to his major oil supporters rather than the American populace, according to critics.
Reports have also surfaced indicating that Trump finalized his comprehensive economic strategy just hours before its public announcement. As per the Washington Post, he settled on the details around 1 PM on Wednesday, announcing it at 4 PM.
The declines in US markets capped another bleak day for global indices, with the FTSE 100 dropping 5% in London, the CAC 40 falling 4.3% in Paris, and the Nikkei 225 decreasing by 2.8% in Tokyo.
“It’s becoming increasingly clear that the tariff hikes will be significantly greater than anticipated,” stated the Fed Chair Jerome Powell. “The economic impacts are likely to be similarly substantial, leading to increased inflation and slower growth.”
