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Market Volatility Fueled by Erroneous Tariff Report
A recent misleading report regarding a potential 90-day suspension of tariffs by President Donald Trump led to dramatic fluctuations in the stock market, as major indices experienced a swift shift from substantial losses to brief gains and then back into the red.
The turmoil began around 10:30 a.m. when the Dow Jones industrial average surged sharply, only to later plummet, eventually showcasing a loss of 629 points. The S&P 500 mirrored this volatility, initially spiking before retracting.
The unsettling swings were triggered when CNBC and various social media platforms circulated claims suggesting that National Economic Council Director Kevin Hassett had indicated Trump’s possible intent to pause tariffs for all countries, excluding China. However, these assertions lacked verification.
White House Press Secretary Karoline Leavitt swiftly dismissed the information as “fake news,” contributing to the market’s subsequent decline as clarity emerged from the administration.
It seems that the source of the rumor may have been an interview in which Hassett discussed the administration’s stance on tariffs. When pressed about the idea of a 90-day halt, proposed by billionaire investor Bill Ackman, Hassett remarked, “I think that the president is going to decide what the president is going to decide,” and urged caution regarding speculative rhetoric.
This market rollercoaster came on the heels of a staggering loss on Friday, where the Dow Jones suffered a decline of 2,231 points and the S&P 500 saw a drop of 6 percent. The week prior was marked as the most challenging for the stock market since 2020 and recorded only the fourth instance in history where the Dow lost over 2,000 points in a single session.
The tumult stemmed from Trump’s announcement of broad tariffs, set at a minimum of 10 percent for all countries except Russia. He referred to this decision as America’s “Liberation Day,” with several nations facing tariffs exceeding this baseline.
In light of these economic developments, JPMorgan’s Chief Economist Bruce Kasman has elevated the forecast for a global recession in 2025 to 60 percent, up from an earlier 40 percent assessment. Such a significant shift is reminiscent of patterns observed in 1968, which preceded an economic downturn.
Despite these sobering numbers, Trump defended his tariff strategy, emphasizing on social media that “oil prices are down, interest rates are down, food prices are down, there is NO INFLATION,” and claimed that the U.S. is reaping billions weekly from countries subject to tariffs. His posts urged Americans to embrace a strong stance rather than panic, encapsulating a defiant message about the administration’s trade policies.
Source
finance.yahoo.com