Date: Thursday, April 03, 2025
By: DailyForex.pk
U.S. stock futures tumbled on Thursday following President Donald Trump’s surprise announcement of sweeping new tariffs on imports, triggering fears of a renewed global trade war and sending shockwaves across equity, commodity, and currency markets.
🔔 What Happened?
Trump announced a baseline 10% tariff on all foreign imports, alongside increased reciprocal duties targeting countries with significant trade surpluses against the U.S., including:
- China: 34% tariff
- Japan: 24% tariff
- Vietnam: 46% tariff
- European Union: 20% tariff
- India: 26% tariff
🚗 Additionally, a 25% tariff on all foreign-made automobiles has officially come into effect, causing further strain on the auto sector and consumer sentiment.
📉 Market Reaction
- Dow Futures: -1,010 pts (-2.4%)
- S&P 500 Futures: -166 pts (-2.9%)
- Nasdaq 100 Futures: -645 pts (-3.3%)
- Gold Prices: Hovering near record highs above $3,100/oz
- Oil Prices: Dropped sharply on global demand concerns
- USD Index: Slipped as safe-haven flows increased
📦 Sector Impact
The auto sector was hit the hardest, with Ford (F), General Motors (GM), and Stellantis (STLA) dipping in extended hours. Tech stocks also faced selling pressure due to their exposure to Chinese supply chains.
🌍 Global Reaction
International leaders swiftly responded:
- China called the move “unilateral bullying” and vowed retaliation.
- EU pledged a coordinated counter-response.
- Australia labeled the tariffs “illogical” but avoided retaliatory measures.
- Switzerland is reviewing its options after being slapped with a 31% levy.
📊 Fed in Focus
Federal Reserve Governor Adriana Kugler warned of inflation risks from the new tariffs, noting that progress toward the Fed’s 2% inflation target has stalled. Policymakers now face increased pressure ahead of key economic releases, including Friday’s Nonfarm Payroll report.
🔮 Outlook: What Traders Should Watch
- US PCE Price Index: Could influence Fed’s rate cut decisions.
- Tariff Countermeasures: Likely announcements from China and EU.
- Gold & Safe Havens: May see continued demand amid market volatility.
- Equities: Volatility expected to persist ahead of April 5 tariff implementation.
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