Panic can be felt through the US stock market as the Trump administration made good on its promise to slap tariffs on $200 billion of Chinese goods. This coincides with the weakening of most markets, particularly in the Euro sector, as the dollar shows warning signs of dwindling.
Areas such as Turkey and Argentina in Latin America seemed to struggle following the aftermath of the falling dollar. Bloomberg notes Argentina tried to spiral out of its own predicament but stayed on as interest rates hiked all the way up to 60 percent. In contrast, European economies also fell, citing trouble with tariffs as well as Britain's costly Brexit.
The dwindling stocks reeled from the effects of the tariffs that Trump slapped on Chinese and European trade after he reasoned he wanted to bring trade home. Investors were seen as cautious, with Fort Pitt Capital Group senior portfolio manager Kim Forrest says that they may be waiting for the effects of the tariffs. Most investors, according to her, were worried that the effects may be felt in the latter half of the year.
The most hurt by the tariffs are export companies supplying chemicals and materials for fabrication to China and other countries. Tech company stocks also fell, affected by the inability to ship their goods. China has threatened retaliation to Trump's initial tariffs. A reactionary 25 percent could be slapped on $60 billion worth of American exports and it could be imposed any time soon.
While it was a gloomy day at the Stock Exchange, the US' warming relationship with Mexico and Canada were the lone bright spots. CNBC notes that before falling, stocks were actually at record high amounts as the US appeared to make headway in its diplomatic discussions with both countries. Sameer Samana, the strategist at the Wells Fargo Investment Institute, said that a scenario where markets would let things play out between the US and China is very possible.
Telecom and crude were also affected by the plunging stocks. The worldwide price for crude landed at around $70 per barrel, a first in over a few months of strong values. In Asia, Japan held the lone rising value in stocks, with China and Hong Kong both reeling as the trend of falling stocks reached a global scale. With neither US nor China budging in the trade dispute, it doesn't seem like the stocks would reach a strong concluding kick this year.
