Stocks Swing on Trade War & Geopolitical Fears – US Market Wrap

Stocks fell around the world as fears about the effects of a trade war on the global economy prompted a rush to short-term bonds, gold, and haven currencies.

Equities fell in New York, London, and Tokyo, with the S&P 500 erasing its $3.4 trillion post-election rally. The United States imposed the largest set of new tariffs in nearly a century, levying levies on a wide range of goods from China, Canada, and Mexico, prompting swift retaliations. Trade tensions have fuelled concerns about growth, with money markets fully pricing in three quarter-point rate cuts by the Federal Reserve in 2025. The dollar fell.

The moves, which come ahead of President Donald Trump’s address to Congress on Tuesday night, represent a new phase in his broadening economic and diplomatic reset of America’s global role. Treasury Secretary Scott Bessent expressed confidence in the tariff plans, despite the stock market’s decline.

If Wall Street learnt anything from Trump’s first term as president, it’s that the stock market is how he keeps score. The theory was that the president’s proclivity for using equities as a report card meant that any policy that roiled markets would prompt him to reconsider his plans. But as stocks plummet, investment professionals are beginning to wonder if there is a “Trump Put” after all.

The S&P 500 index fell 1.2%. The Nasdaq 100 declined 0.4%. The Dow Jones Industrial Average declined 1.6%. A gauge of the Magnificent Seven megacaps fell 0.7%. The Russell 2000 fell 1.1%.
The yield on 10-year Treasuries increased five basis points to 4.20 percent. A dollar index fell 0.6%.