Stocks Decline as Trump’s Tariffs Weigh on Market Sentiment, Gold Nears Record High

Asian stocks saw a dramatic reversal on Thursday, slipping from initial gains into losses due to concerns over the economic repercussions of President Donald Trump’s trade policies. While early optimism was sparked by a soft U.S. inflation report, the markets soon became wary of the potential fallout from Trump’s newly implemented tariffs. The tariffs on U.S. steel and aluminum imports, which took effect on Wednesday, have triggered retaliatory measures from Canada and Europe, adding to global trade uncertainties.

Hong Kong’s Hang Seng Index fell 1.4%, and mainland China’s blue-chip stocks lost 0.7%. Other major Asian markets, including Japan’s Nikkei, Taiwan’s equities, and South Korea’s KOSPI, all posted losses. Australia’s benchmark stock index also closed 0.5% lower, confirming a technical correction. Futures indicate a negative start for Wall Street, with the S&P 500 and Nasdaq futures both trending downward.

Despite the bleak market conditions, gold prices rose, nearing a record high, as investors sought safe-haven assets amidst growing uncertainty. The precious metal climbed 0.5% to $2,947.06, just shy of its previous peak. Meanwhile, the yen strengthened against the U.S. dollar, and U.S. Treasury yields dipped, reflecting increased caution among investors.

The volatility in global markets underscores the ongoing concerns about inflation and economic stability, with analysts warning that the full effects of Trump’s tariff policies have yet to be fully realized. The latest inflation figures failed to capture the broader impacts of the trade war, leaving analysts uncertain about future market trends.

SOURCE: REUTERS