Global Stocks Dip Amid U.S. Tariff Hike and Economic Outlook Concerns

Global stock markets experienced a decline on Tuesday as investors reacted to the implications of newly introduced U.S. tariffs and comments from Federal Reserve Chair Jerome Powell on the economy. President Donald Trump raised tariffs on steel and aluminium imports to 25%, up from 10%, removing country exceptions and product-specific exclusions. This move also hinted at upcoming global reciprocal tariffs, leading to speculation that these actions might be used as leverage in trade negotiations.

The tariff increase, effective from March 4, sparked a backlash from major trade partners, including Mexico, Canada, and the European Union, all of whom condemned the decision. The EU pledged to introduce “firm and proportionate countermeasures” in response. Trump also suggested that Australia might receive an exemption from the tariffs, fueling further speculation that the measures could be part of broader trade negotiations.

On Wall Street, the stock market attempted to recover from early losses, with investors turning their attention to Powell’s remarks during a Senate Banking Committee hearing. The Federal Reserve Chair stated that the central bank had no immediate plans to cut interest rates, emphasizing the strength of the overall economy, low unemployment, and inflation rates above the Fed’s 2% target. This provided some reassurance to investors, although concerns remained over the impact of the tariff increases.

The Dow Jones Industrial Average fell 35.11 points, or 0.08%, to 44,434.21, while the S&P 500 dropped by 5.56 points, or 0.09%, to 6,060.98. The Nasdaq Composite also lost 13.62 points, or 0.06%, ending at 19,701.77. Meanwhile, the MSCI index, which tracks global stocks, slipped 0.10%, while Europe’s STOXX 600 index saw a slight increase of 0.2%, hitting an intraday record.

In the broader financial landscape, U.S. Treasury yields rose following Powell’s remarks, with the 10-year benchmark notes increasing by five basis points to 4.545%. The dollar index fell by 0.24%, and oil prices climbed due to concerns over potential supply disruptions from Russia and Iran. U.S. crude rose by 1.05%, and Brent crude increased by 1.16%, though tariff uncertainties limited further gains.

Source: Punch