FT News Briefing Trump’s tariffs rattle global markets
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Apr 4, 2025 President Trump's tariffs have sent global markets into a tailspin, leaving investors anxious about a possible recession. Financial sectors and exporters are feeling the brunt of this economic shift. The U.S. dollar is weakening while the euro strengthens, reflecting changing market sentiments. With concerns about retaliatory actions from other countries, major companies are seeing stock prices decline. Furthermore, these tariffs might heighten manufacturing costs and hurt consumer demand, complicating the inflation landscape.
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Tariff Impact on Global Markets
- U.S. President Donald Trump’s tariffs triggered a global market sell-off, impacting major indices like the S&P 500 and Europe's Stock 600.
- Investors are concerned about the scale and manner of the tariffs, leading to a weaker outlook for U.S. growth.
Dollar Weakness and Euro Strength
- The U.S. dollar weakened significantly due to a loss of confidence in U.S. assets, particularly stocks.
- Surprisingly, the euro strengthened despite the Eurozone being a target of the tariffs, reflecting shifting market sentiment.
Recessionary Concerns and Inflationary Pressures
- Economists are concerned about the potential for U.S. recession due to the tariffs, with some predicting GDP declines.
- The tariffs create a supply shock, increasing inflation and complicating the Federal Reserve's efforts to manage the economy.