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In light of the recent tariff announcements affecting multiple U.S. trading partners, President Donald Trump addressed the media before departing on Air Force One to Miami, downplaying market concerns.
What Happened: President Trump likened the stock market’s downturn to a medical procedure, stating, “I think it’s going very well, it was an operation… It’s a big thing. I said this would be exactly the way it is. We have $6-$7 trillion coming into our country, and we have never seen anything like it.”
He went on to express optimism, asserting, “The market is going to boom, the stock is going to boom, the country is going to boom, and the rest of the world wants to see if there is any way they could make a deal.”
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These proclamations followed the stock market’s steepest decline in over three years, with the Dow Jones Industrial Average and the S&P 500 experiencing their worst trading day since June 2020, while the Nasdaq marked its most substantial single-day drop since March 2020. Notably, the Dow dropped 1,679 points, making it one of the most significant declines in its history.
Why It Matters: To address the ongoing trade deficit, Trump invoked a 1977 statute to declare a trade emergency, which led to the introduction of new tariffs on Wednesday.
A broad 10% tariff was implemented across all trading partners, with additional tariffs imposed on nations identified as “bad actors.”
Significantly impacted by the new tariffs are China, Vietnam, Cambodia, and Sri Lanka, while Canada and Mexico have been exempted.
As a result of these developments, key stock market indices have entered correction territory, which is marked by a drop of over 10% from recent highs.
The S&P 500, having reached a peak of 6,147.43 points on February 19th, has now seen a decline of 12.22%. The Nasdaq 100 has experienced an even steeper fall, down 16.65% from its 52-week high of 22,222.61 points, nearing the brink of a bear market with a potential -20% decline.
Source
finance.yahoo.com