Global Markets React to Trump Tariffs and EU Inflation Data
Global financial markets experienced significant fluctuations on April 1, 2025, as investors reacted to a series of economic developments. The announcement of new tariffs by former President Donald Trump, now impacting various sectors, led to a sharp decline in U.S. stock indices. The Dow Jones Industrial Average dropped by 2%, while the S&P 500 and Nasdaq also saw notable decreases.
In Europe, markets were closely watching the latest EU inflation data, which came in higher than expected at 2.5%. This unexpected rise in inflation rates prompted a sell-off in European bonds, with yields on German 10-year bunds rising to 1.8%. The European Central Bank's response to these figures will be crucial in the coming weeks, as policymakers weigh the need for potential interest rate adjustments.
Asian markets were not immune to the global economic jitters, with Tokyo's Nikkei 225 index falling 1.5% amid concerns over the broader impact of Trump's tariffs on global trade. Meanwhile, emerging markets showed mixed responses, with some currencies weakening against the dollar as investors sought safer assets.
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Why is the stock market dropping?
The two benchmarks also suffered heavily in March, recording their biggest monthly percentage drops since December 2022, as President Donald Trump rolled out a swathe of new tariffs which raised fears of a global trade war that would hurt economic growth and spur inflation.
Why is the Nasdaq falling?
The S&P 500 and Nasdaq posted their biggest one-month declines since late 2022. President Trump is due to unveil wide-ranging reciprocal tariffs on countries that charge levies on U.S. exports. The new tariffs are slated to go into effect on April 2, which the president refers to as 'Liberation Day.'
Why are stocks tanking?
NEW YORK/LONDON, March 28 (Reuters) - Safe-haven gold hit a fresh record high on Friday as an index of global shares fell, weighed down by worries over a looming trade war sparked by tariff decisions from U.S. President Donald Trump.
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