NEW YORK (AP) — U.S. stocks are facing uncertainty as Wall Street approaches the end of a turbulent week, marked by escalating tensions from President Donald Trump’s trade war with China.
The S&P 500 fell by 0.4 percent in early trading on Friday, following a significant slide that wiped out much of its gains achieved earlier in the week after Trump announced a pause on tariffs for various countries outside of China.
As of 9:35 a.m. Eastern time, the Dow Jones Industrial Average decreased by 232 points, or 0.6 percent, while the Nasdaq composite dipped by 0.1 percent.
Market movements have been volatile recently, with investors grappling to decipher the direction of Trump’s trade war and its potential to trigger a global recession.
In a significant retaliatory action, China declared on Friday that it would increase its tariffs on U.S. exports to 125 percent, aligning with the U.S. tariffs imposed, excluding a previously instituted 20 percent tariff.
A spokesman from China’s Finance Ministry remarked that the U.S. strategy of imposing unusually high tariffs has transformed into a mere numbers game, devoid of practical economic consequences and likely to be regarded as a joke in the annals of global economics.
The spokesman added that should the U.S. persist in negatively impacting China’s interests, China would staunchly retaliate and fight back decisively.
The escalating trade tensions between the world’s largest economies pose risks of widespread economic damage, even in the wake of Trump’s temporary suspension of tariffs on some other countries.
In a reflection of heightened market fear, the price of gold surged more than 2 percent to $3,250 per ounce, continuing its reputation as a refuge for investors during troubled times.
Contrarily, traditional safe havens did not exhibit similar trends; the U.S. dollar experienced a decline against various currencies, including the euro, Japanese yen, and Canadian dollar.
Prices for long-term Treasury bonds also dropped, contrary to their usual status as one of the most secure investments. The decrease in bond prices resulted in higher yields, as investors sought increased compensation for the risk associated with holding them.
The yield on the 10-year Treasury rose to 4.50 percent from 4.40 percent late Thursday, and it surged from just 4.01 percent at the end of the previous week.
Several factors could be driving the increase in yields, such as foreign investors divesting their U.S. bonds due to trade war concerns.
Regardless of the underlying causes, rising yields exert additional pressure on the stock market and elevate borrowing costs for mortgages and other loans for American households and businesses.
Even robust profit reports from some major U.S. banks were insufficient to buoy the stock market.
JPMorgan Chase, Morgan Stanley, and Wells Fargo all published first-quarter profits that surpassed analysts’ expectations. JPMorgan Chase shares rose by 1.6 percent, while Morgan Stanley witnessed a 0.2 percent decline, and Wells Fargo saw a 3 percent drop.
In addition, another inflation report that exceeded expectations failed to uplift market sentiment, even though it could provide the Federal Reserve with room to consider interest rate cuts to bolster the economy.
Lower interest rates would make mortgages and other loans more affordable for consumers and businesses.
However, Friday’s wholesale-level inflation report was retrospective, reflecting price levels from March, raising concerns that inflation could face upward pressure in the months ahead due to the impact of Trump’s tariffs infiltrating the economy.
International stock markets exhibited mixed reactions, as global indexes varied widely.
Germany’s DAX index plummeted by 1.6 percent, whereas the FTSE 100 in London recorded a modest increase of 0.3 percent, buoyed by strong economic growth reported for February in the world’s sixth-largest economy.
Japan’s Nikkei 225 index fell by 3 percent, while Hong Kong’s Hang Seng index rose by 1.1 percent, highlighting the mixed sentiment across different global markets.
As Wall Street navigates through these tumultuous times, investors remain cautious, weighing the implications of ongoing trade disputes and their potential effects on the broader economy.
image source from：https://www.pbs.org/newshour/economy/stocks-shaky-falling-u-s-dollar-and-bond-prices-indicate-more-fear-amid-trade-war
