Why Trump's tariff chaos caused the stock market and recession concerns | Donald Trump News

The United States of Stock Markets fell on Monday amid fears that President Donald Trump's tariff policies can lead to the biggest economy in the world in recession. After years of impressive growth, America's economic exclusivity was called into question.

Concern about the economic decline has caused the stock exchange route, which deleted $ 1.7 trillion from the S&P 500-viewed equity index in the world. It fell by 2.7 percent, dragging it 9 percent below the highest maximum that reached February 19th.

The technological heavy NASDAQ-100 reported its worst day in 2022, eraising a value of over $ 1 trillion. Investors sold shares in the so-called “magnificent seven” -Alphabet, Amazon, Apple, Microsoft, Meta, Nvidia and Tesla.

What caused a decline?

The market sale comes when Trump's tariffs forward and forwards are diverging to investors and fear the US economy can be focused on a great delay or even recession.

Last week, Trump hit a 25 percent tariff for imports from Mexico and Canada and doubled the percentage of Chinese goods up to 20 percent, just to announce two days later that it will do so delay Some Mexican and Canadian tariff tariff marks until April 2.

Trump has also threatened to impose a global regime of reciprocal tariffs: each country will face the same fee that chooses to impose on the United States from April 2. 25 -Protect Tariff for Imports of steel and aluminum He is also ready to take effect on Wednesday.

Tariffs seem tuned to increase inflation and consumers will bear the main weight of higher costs. Many Americans could be forced to tighten their belts, which would reduce growth and increase unemployment.

Continues Public sector and Geopolitical They have also strengthened the instability of US policy. At CNBC, Holger Schmiding, Benberg Bank's chief economist, describes Trump as “chaos and confusion agent.”

“What comes out of the oval office … is just complete indecision, confusion and mixed messages and the investment community loses confidence,” says Peter Tuchman, a stock market trader, in a video Posted on X.

What did Trump actually say?

In interview With Fox News, which aired on Sunday, Trump suggested that the risk of an economic drop – if that happens – it would be worth it in the cause of the wider economic changes that he was trying to engineer.

“I hate to predict such things. There is a period of transition because what we do is very great, “Trump said. “We return wealth to America. It's a big thing … It takes a little time, but I think it should be great for us. “

Asked if he thought the US import tariffs would increase inflation, he said: “You can get it. In the meantime, guess what? Interest rates are decreasing. “

He also doubled in his commercial protectionist agenda, saying, “We (the US) have been detached to levels that have never been seen so far, and we will return a lot of it.”

How does the White House react?

While Wall Street panicked yesterday, the White House maintained an optimistic perspective, pointing to major investments from corporate leaders.

White House spokesman Kush Deza said on Monday that the CEOs had responded to Trump's “America First” agenda, which was marked by tariffs and deregulation, promising “trillions in investment commitments”. These commitments, he said, “will create thousands of new jobs.”

Meanwhile, in an interview with CNBC on Monday, Kevin Khasece, head of the Trump National Economic Council, has played fluctuations in the financial market such as Blips in the Data.

Howard Luni, Trump's trading secretary, told NBC Meet The Press: “There will be no recession in America … You will see the largest set of growth coming from America in the next two years,” Luni said.

Are Wall Street vibrations common elsewhere?

Asian shares dropped sharply on Tuesday morning, as the sale of the US market the previous day has expanded globally. Nikkei's Japanese shares have slid by about 3 percent, reaching its largest level since September.

Chinese stocks are also not immunized against the decreased mood. The blue chip index fell by 0.5 percent, while the Hong Seng index in Hong Kong is 0.8 percent lower. The Australian comparison indicator also dropped by 0.8 percent.

The assets of the Safe Haven-to which investors are flocking to periods of market uncertainty-now they are in demand, with the Japanese yen touched a five-month maximum against the dollar, 147.07 for a dollar. The Swiss Frank has also intensified. Both currencies are considered stable because of their predictable economic backgrounds and a low inflationary environment.

Gold, long, financially securely, reached $ 2895.75 an ounce, within the distance of the record from the record last month. Gold is already 10 percent so far in 2025 after climbing 27 percent last year.

Oil prices, which usually move in tandem with the global gross domestic product, fell for the second day on Tuesday. Brent Futures, Global Benchmark, dropped by 0.65 percent to $ 68.83 a barrel.

What happens after that?

Unlike Trump's first term, when the economy or fluctuations in the stock market often lead to consequences of policy, it seems that the US president seems to be determined to follow restrictive trade arrangements this time.

Citi analysts, for their part, have reduced their recommendations for US stocks to “neutral” from “overweight”, claiming that the US economy can no longer exceed the rest of the world in the coming months.

Last week, Goldman Sachs Economists raised its chances of recession within the next 12 months from 15 to 20 percent, while JPMorGanchase raised the likelihood of 30 percent to 40 percent “Due to the U.S. end policies”.

The extraction (or return rate) of a two -year bond of the US government, which is upset with the expectations of interest, fell by 0.05 percent yesterday to five months low. As such, many expect the US Federal Reserve to reduce loan costs.

Fed's FED rate is currently on about 4.3 percentwhich is high from the latest historical standards.

Traders now appreciate 0.85 percent reduction in interest rates from the Fed this year, compared to 0.75 percent of base points on Monday, According to the London Group on the Stock Exchange. Lower loan costs are designed to help stimulate growth in a slow economy.

Dust Newnaha, a senior strategist of the Asia-Pacific rates at TD Securities, told Reuters news agency that “markets have now received the note that the administration intends to tear the help of the tape.”

Since his first day of service, Trump has stated his desire to tame us inflationS At the same time, he made the trade rates central for his presidency. It is unlikely to achieve both goals of politics at the same time.

“The recession may be the drug for the creation of disinflation … So far, this is a controlled demolition,” Newnaha said.