The US stock market lost $2 trillion after tariffs were imposed

At the end of Wednesday, the Dow Jones Index (US30) rose by 0.56%. The S&P 500 Index (US500) rose by 0.67%. The Nasdaq Technology Index (US100) was up 0.87%. The US stock markets are set to open sharply lower on Thursday as investors react to US President Donald Trump’s aggressive tariff measures. Index futures collapsed after the stock market closed, after Trump announced massive retaliatory tariffs, losing $2 trillion in 20 minutes. Trump’s sweeping trade policies include a universal tariff of 10%, additional levies on 60 targeted countries, and 25% duties on auto imports. Trump claims these measures are aimed at addressing unfair trade imbalances.

Equity markets in Europe mostly fell yesterday. Germany’s DAX (DE40) was down 0.66%, France’s CAC 40 (FR40) closed down 0.22%, Spain’s IBEX 35 (ES35) added 0.40%, and the UK’s FTSE 100 (UK100) closed negative 0.30%. European Commission President Ursula von der Leyen condemned US President Trump’s new global tariffs as a “serious blow to the world economy,” warning that they would cause uncertainty, protectionism, and have dire consequences. She called for talks to remove trade barriers but reiterated the EU’s willingness to retaliate.

Silver prices fell more than 1% to settle below $33.50 an ounce on Thursday, hitting a one-week low, as traders faced market uncertainty following US President Donald Trump’s sweeping tariff measures. Trump imposed a 10% base tariff on all imports, with harsher duties targeted at major trading partners such as China (34%), the EU (20%), and Japan (24%). In addition, a 25% tariff on foreign-made cars went into effect immediately. Defending the move, Trump called the tariffs a strategy to support domestic manufacturing and reduce the trade deficit. Beijing urged Washington to lift the unilateral tariffs and engage in honest dialogue with trading partners, but did not specify what retaliatory measures it planned to take.

WTI crude prices fell nearly 3% to around $69 a barrel on Thursday as markets became more cautious about risks. While imports of oil, gas, and petroleum products were not subject to duties, sweeping tariffs imposed by President Donald Trump on several countries, including base tariffs of 10%, 34% for China, and 20% for the EU, have raised fears of escalating trade disputes that could reduce global energy demand. The bearish sentiment was exacerbated by the fact that US crude inventories unexpectedly rose by 6.2 million barrels last week, contrary to expectations of a 2 million barrel decline, driven by a surge in Canadian imports. Investors now await the OPEC+ meeting later today for more information on the global supply outlook.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.28%, China’s FTSE China A50 (CHA50) fell by 0.51%, Hong Kong’s Hang Seng (HK50) lost 0.41%, and Australia’s ASX 200 (AU200) was positive 1.04%. China is facing the largest tariff hike in history on almost all Chinese goods, bringing the total duties to 54%. This could put significant downward pressure on Chinese indices, as well as currencies such as the New Zealand and Australian dollars, as these economies rely heavily on exports to China. China has announced plans for “decisive” countermeasures against the Trump administration’s tariffs on Chinese goods to protect its interests.

Japanese Trade Minister Yoji Muto said Thursday that all options remain open in response to President Trump’s recently announced tariffs. He called the decision “extremely regrettable” and reiterated Japan’s request for an exception to the tariffs during a meeting with US officials. Muto emphasized the need for a cautious but firm response and announced the creation of a task force to assess the impact of the 24% tariff on Japanese goods. The previously planned 25% tariff on car imports will take effect as scheduled, dealing a significant blow to Japan’s auto industry.

The Australian dollar held near $0.63 on Thursday, remaining largely unscathed after US President Trump announced a sweeping new tariff regime against the country’s trading partners. Prime Minister Anthony Albanese earlier said his government would not impose retaliatory tariffs, emphasizing that the US is not Australia’s main trading partner, as less than 5% of Australian exports go to the US.

Malaysia is in talks with US officials to ensure fair trade terms after President Trump imposed new tariffs, including a 10% universal import levy and a retaliatory duty of 24% on Malaysian goods. The Ministry of Investment, Trade and Industry (MITI) has acknowledged the tariffs as devastating, but stressed that Malaysia aims to maintain open trade rather than retaliate.