Tag: Tariffs

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Tesla’s European market meltdown – sales plunge 49% amid brand damage and fierce competition

Tesla's European sales fall!

Tesla’s vehicle sales in Europe plummeted by 49% in April 2025, marking the fourth consecutive month of decline.

Despite an overall 27.8% rise in battery-electric vehicle sales, Tesla struggled to maintain its foothold in the region.

The drop in sales has been attributed to increasing competition from Chinese automakers, a shift in consumer preferences towards hybrid vehicles, and growing backlash against CEO Elon Musk’s political affiliations.

Tesla’s market share in Europe nearly halved, falling from 1.3% to 0.7%. The company’s aging lineup, particularly the Model Y, has failed to attract new buyers, while rivals such as BYD have overtaken Tesla in European EV sales for the first time.

Additionally, European carmakers are cutting costs and adapting to U.S. tariffs on auto imports, further intensifying competition. Chinese EV manufacturers are also cutting EV prices.

While Tesla faces challenges in Europe, the broader EV market continues to expand, driven by government incentives and stricter emission targets.

However, unless Tesla refreshes its lineup and rebuilds consumer trust, its dominance in the European market may continue to erode.

The company’s future remains uncertain as it navigates political controversies and shifting market dynamics

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China’s industrial profit accelerates in April 2025 – despite Trump’s tariffs

China factory output

Despite the heavy tariffs imposed by former U.S. President Donald Trump, China’s industrial sector has demonstrated remarkable resilience.

In April 2025, industrial profits rose by 3%, marking the second consecutive month of growth.

This increase was largely driven by Beijing’s strategic policy measures, which cushioned the impact of the tariffs and supported private enterprises.

In the first four months of 2025 China’s industrial profits rose 1.4%, according to data released on 27th May 2025.

Trump’s administration had levied tariffs as high as 145% on Chinese imports, prompting Beijing to retaliate with its own trade restrictions.

However, rather than crippling China’s manufacturing sector, these tariffs led to a shift in trade dynamics. Chinese exporters successfully found alternative markets, particularly in Southeast Asia and Europe, mitigating the losses from reduced U.S. trade.

It isn’t unusual for businesses to weather and absorb such tariffs but more usually, the consumer bears the brunt and pays some, if not all, of the increased costs.

High-tech manufacturing and equipment production saw notable gains, with profits in these sectors rising by 9% in the first four months of the year.

Additionally, government subsidies for consumer electronics and appliances helped boost domestic demand, further stabilising industrial growth.

While state-owned enterprises reportedly faced challenges, private firms and foreign-invested businesses saw profits improve.

Analysts suggest that China’s ability to adapt to external shocks underscores the resilience of its industrial economy, even in the face of aggressive trade policies

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Japan’s core inflation rises to 3.5% – higher than expected

Japan economic data

Japan’s inflation figures for April 2025 have revealed a continued rise in consumer prices, with the Consumer Price Index (CPI) climbing 3.6% year-on-year.

This marks a sustained period of inflation above the Bank of Japan’s (BoJ) target of 2%, prompting speculation about potential interest rate hikes later in the year.

Core inflation, which excludes fresh food, rose 3.5% YoY, exceeding market expectations. A major driver of this surge has been food prices, particularly rice, which has soared by an astonishing 98% compared to last year.

The sharp increase has led the government to release emergency stockpiles to stabilise the market.

The BoJ faces a delicate balancing act. While inflation remains strong, economic uncertainty – partly fueled by U.S. tariffs, could complicate monetary policy decisions. The central bank has already raised rates in recent months but has paused further hikes to assess the broader economic impact.

With inflationary pressures persisting, analysts predict that the BoJ may tighten policy again by October 2025.

Concerns over global trade and domestic economic stability could influence the timing of any further rate adjustments.

The core inflation increase of 3.5% was far higher than expected.

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Are we underestimating the impact of tariffs on S&P 500 earnings growth?

Asleep

As global trade tensions escalate, many investors and analysts are questioning whether markets are too complacent about the long-term effects of tariffs on corporate earnings.

While some argue that businesses have adapted to protectionist policies, others warn that the S&P 500’s earnings growth could face significant headwinds.

Tariffs: A hidden threat to profit margins

Tariffs increase costs for companies reliant on imported goods and materials. Businesses must either absorb these costs, pass them on to consumers, or find alternative suppliers – each option presenting challenges.

According to Goldman Sachs, an additional 5% tariff could reduce S&P 500 earnings by 1-2%.

A 100% tariff would equate to around 10-20% reduction in the S&P 500 – and that’s correction territory.

Retailers and manufacturers are particularly vulnerable

Companies like Best Buy, Walmart, and Target rely on imports, and higher tariffs could suppress profit margins or lead to higher consumer prices, potentially dampening demand.

Market sentiment vs. economic reality

Despite concerns, Wall Street has remained relatively optimistic. A recent 90-day tariff pause between the U.S. and China has boosted investor confidence, leading firms like Goldman Sachs and Yardeni Research to raise their S&P 500 targets.

This optimism may be short-lived if tariffs resume or escalate

Sector-specific risks

Certain industries are more exposed than others

Technology: Supply chain disruptions and higher costs for components could reduce profit margins.

Consumer Discretionary: Higher prices on imported goods could weaken consumer spending.

Industrials: Increased costs for raw materials could slow growth and investment.

The bigger picture: long-term economic impact

Beyond immediate earnings concerns, tariffs could stifle innovation, reduce global competitiveness, and slow economic growth.

Citi analysts estimate that aggressive tariffs could cut S&P 500 earnings growth by 2-3%.

A false sense of security?

While markets have bounced back from initial tariff shocks, the long-term effects remain uncertain.

Investors should closely monitor trade policies, sector-specific risks, and corporate earnings reports to assess whether the S&P 500’s growth trajectory is truly secure – or dangerously fragile.

Time will tell – but the S&P 500 is vulnerable to pressure right now!

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UK first quarter GDP better than expected at 0.7%

UK GDP up!

The UK economy has defied expectations, recording a 0.7% increase in GDP in the first quarter of 2025 – better than the forecast of 0.6%.

This surge places Britain ahead of economic heavyweights, including the United States, Canada, France, Italy, and Germany.

A key driver of this growth has been the service sector, which demonstrated resilience amid global economic uncertainty. Production also experienced a boost, further solidifying the UK’s standing as an economic force.

Chancellor Rachel Reeves was quick to praise the achievement, citing the government’s commitment to fostering stability and investment.

However, economists are watching closely as Britain navigates potential challenges ahead, particularly in light of the latest global trade tariffs imposed by Donald Trump in April.

These new restrictions could slow growth in the coming months, but for now, the economy is holding firm. However, the UK – U.S. tariff deal is likely to lessen the overall impact and present a further improvement in the second quarter.

With businesses continuing to adapt to shifting market conditions, the UK’s better-than-expected performance is a welcome sign.

Data source: Home – Office for National Statistics

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U.S. inflation rate at 2.3% in April 2025 – less than expected

U.S. inflation

April 2025 saw the U.S. inflation rate ease to 2.3%, marking its lowest level since February 2021.

The consumer price index (CPI) rose 0.2% for the month, aligning with expectations but slightly below the forecasted 2.4% annual rate.

Core CPI, which excludes volatile food and energy prices, also increased 0.2%, maintaining a 2.8% year-on-year rate.

Shelter costs, which make up a significant portion of the index, rose 0.3%, contributing to more than half of the overall inflation movement.

U.S. egg prices dropped 12.7%, though they remained 49.3% higher than a year ago.

The impact of Trump’s tariffs remains uncertain, with negotiations potentially influencing inflation trends in the coming months.

Court to judge on legality of ‘reciprocal’ tariffs

U.S. Court of International Trade is set to hear arguments in a case challenging President Donald Trump’s tariffs.

The lawsuit filed by five domestic businesses argues that the law Trump invoked to impose his ‘reciprocal’ tariffs does not actually give him the power he claims.

The Department of Justice maintains that that law ‘clearly’ authorises the president to impose tariffs.

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Trump tariff roll-back – a win for China? U.S. markets rejoice the ‘deal’

U.S. markets gain on U.S China tariff roll-back announcement

The U.S. stock market surged as investors cheered a breakthrough in trade negotiations between Washington and Beijing.

The rollback of tariffs, announced as part of a new trade agreement, sent the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite soaring.

The deal, which slashes ‘reciprocal’ tariffs on both sides, is seen as a major de-escalation in the ongoing trade war that has rattled global markets for years.

Wall Street’s Reaction

Markets responded with enthusiasm as the Dow Jones Industrial Average jumped over 1,000 points, while the S&P 500 climbed more than 2.5%, and the Nasdaq surged by nearly 3%.

Investors had been wary of prolonged trade tensions, which had weighed heavily on corporate earnings and economic growth.

The tariff rollback signals a potential thaw in relations, boosting confidence across sectors, particularly in technology, retail, and manufacturing.

Tariff rollback

Under the agreement, U.S. tariffs on Chinese imports will be reduced from 145% to 30%, while China’s tariffs on American goods will drop from 125% to 10%. The reductions will be in effect for 90 days, allowing both nations to continue negotiations on a broader trade framework.

Treasury Secretary Scott Bessent emphasised that neither side wants a complete decoupling, and the rollback is intended to restore trade flows disrupted by years of economic brinkmanship.

China’s perspective: A strategic victory?

While the U.S. markets celebrated, China views the deal as a significant win. Beijing has sought relief from the steep tariffs imposed by Washington, which had strained its export-driven economy.

The agreement not only reduces financial pressure on Chinese manufacturers but also positions China as a key player in shaping future trade policies.

Some analysts argue that Beijing successfully leveraged its economic resilience to push Washington toward concessions, reinforcing its global influence.

Looking ahead

Despite the optimism, uncertainties remain. The 90-day window for negotiations suggests that further trade disputes could arise if talks stall. But will the U.S. allow that after the stock market turmoil Trump’s tariffs originally created?

Additionally, Federal Reserve Chair Jerome Powell cautioned that while sentiment has improved, the economic impact of previous tariffs has yet to fully materialise. Investors will be watching closely for signs of sustained progress, as any setbacks could trigger renewed volatility.

For now, Wall Street is basking in the relief of a tariff truce, with hopes that this momentum will lead to a more stable and predictable trade environment.

Whether this marks the beginning of a lasting resolution or just a temporary reprieve remains to be seen.

It is most likely now a platform for the U.S. to benefit from generally lower tariffs in the future.

There will again be cheap goods on U.S. shelves in time for Christmas.

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U.S. and China agree 90-day ‘reciprocal’ tariff pause and reduction deal

Tariff trade war 90-day pause

In a surprising breakthrough, the United States and China have agreed to suspend most tariffs on each other’s goods for 90 days, marking a significant step toward easing trade tensions between the world’s two largest economies.

Following high-stakes negotiations in Geneva, representatives from both nations announced that reciprocal tariffs would be slashed from 125% to 10%, significantly lowering trade barriers.

However, the U.S. will continue imposing 20% tariffs on Chinese imports related to fentanyl, meaning total tariffs on Chinese goods will settle at 30%.

The agreement signals a temporary thaw in what has been a long-standing economic standoff between Washington and Beijing. U.S. Treasury Secretary Scott Bessent, who played a leading role in the discussions, described the talks as ‘very productive’, crediting the location for fostering an atmosphere of cooperation.

While this move could provide immediate relief for businesses and consumers impacted by trade restrictions, analysts caution that the 90-day suspension may not translate into a long-term solution.

Some experts speculate that ongoing trade negotiations could lead to further reductions, while others warn that unresolved tensions could lead to reinstated tariffs if agreements stall.

For now, the deal presents an opportunity for renewed dialogue, leaving global markets optimistic about future relations between the two economic powerhouses.

How the next three months unfold will determine whether this development is a stepping stone to broader reforms or simply a temporary reprieve in a complex trade dispute.

I expect Trump, having instigated the ‘tariff’ upheaval, will happily hang on to this ‘deal’ with China to avoid any further stock market turmoil.

What really just happened? The markets seem to be rewarding a situation that was artificially created and then ‘fixed’.

Aren’t we simply back where we were before the Trump tariff onslaught or is this really a ‘promise’ for better ‘deals’ to come?

Has it opened a door for better relations?

Create a problem… fix a problem!

It’s all about the U.S.

We’ll see…

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China’s Exports Defy Tariff Pressures, Surge 8.1% in April

China World Trade

Despite the weight of U.S. tariffs imposed by President Donald Trump, China’s export sector has shown remarkable resilience, posting an 8.1% increase in April 2025 compared to the previous year.

This surge comes as a surprise, surpassing economists’ expectations of a modest 1.9% rise.

While China’s outbound shipments to the U.S. plunged by over 21%, exports to Southeast Asian nations soared by 20.8%, with Indonesia and Thailand seeing particularly strong growth.

This shift suggests that Chinese exporters are successfully redirecting their goods to alternative markets, mitigating the impact of U.S. trade restrictions.

The tariffs, which now stand at 145% on Chinese imports, were designed to pressure Beijing into trade concessions. In response, China retaliated with 125% duties on American goods, further escalating tensions.

However, analysts suggest that some of China’s export growth may be attributed to transshipment through third countries and contracts signed before the tariffs took effect.

Despite the export boom, China’s factory activity has taken a hit, falling to a 16-month low in April 2025, with new export orders dropping to their lowest level since December 2022.

Concerns are mounting that the tariffs could spill over into the job market, with estimates suggesting China could lose 16 million jobs tied to U.S. – bound production.

As both nations prepare for high-level trade talks in Switzerland, there is cautious optimism that a phased rollback of tariffs could be on the horizon.

While a comprehensive deal remains elusive, even minor tariff reductions could provide relief to businesses on both sides.

The coming months will be crucial in determining whether China can sustain its export momentum or if the tariff war will take a deeper toll on its economy.

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U.S. Federal Reserve holds interest rates at 4.25% – 4.50% and upsets Trump in the process

Tariffs and the U.S. economy?

The Federal Reserve held its key interest rate steady at 4.25% – 4.50% on 7th May 2025, citing economic uncertainty and the potential impact of tariffs.

Fed Chair Jerome Powell emphasised that the central bank is in wait-and-see mode, monitoring inflation and employment risks.

The decision follows concerns that Trump’s trade policies could lead to stagflation, with rising prices and slowing growth.

While markets reacted positively, analysts remain divided on whether the Fed will cut rates later this year.

Powell stated that future adjustments will depend on evolving economic conditions and the balance of risks.

Trump’s take on this decision was reportedly to call Powell… a fool.

What is stagflation?

Stagflation is an economic condition where high inflation, stagnant economic growth, and high unemployment occur simultaneously.

It presents a challenge for policymakers because measures to reduce inflation can worsen unemployment, while efforts to boost growth may fuel inflation further.

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Signs of weakness in the U.S. economy – is a recession coming and is the United States causing harm to global economies?

Cracking world economies

The U.S. economy is showing cracks as multiple indicators suggest that growth may be slowing.

With GDP shrinking by 0.3% in the first quarter of 2025, concerns about an impending recession have intensified among analysts and investors.

A key driver of this economic downturn is the ongoing trade uncertainty, which has prompted businesses to stock up on imports before new tariffs take effect.

While some experts argue this is a temporary setback, others caution that prolonged trade conflicts could stifle growth for months to come.

Resilient labour market

Despite these concerns, the labour market has remained resilient, with unemployment hovering at 4.2%. However, signs of strain are emerging – job openings have declined, and layoffs have picked up in certain industries.

If hiring slows further, consumer spending could weaken, adding pressure to the economy.

Inflation remains another point of concern. Rising costs of goods and services have strained household budgets, leading to reduced discretionary spending.

The Federal Reserve, which has maintained high interest rates, is carefully assessing whether policy adjustments are needed to prevent a sharper downturn.

On Wall Street, sentiment is divided. Goldman Sachs estimates a 45% probability of a recession, while J P Morgan suggests the likelihood could be as high as 60%.

Some economists believe strategic trade deals and government intervention could avert a full-blown recession, but the margin for error is slim.

Does it really matter if there is to be a recession – it will likely be short lived. It will not please the U.S. President Donald Trump.

While uncertainty clouds the future, one thing is clear – the U.S. economy is at a pivotal moment. Whether policymakers can stabilise growth or if the nation is headed towards a deeper slowdown will depend on the next few quarters and the outcome of Trump’s tariffs.

Tudor Investment Corporation

Paul Tudor Jones, the founder of Tudor Investment Corporation, recently shared his outlook on the U.S. economy, and his perspective isn’t exactly optimistic.

He believes that U.S. stocks are likely to hit new lows before the end of the year, even if President Trump dials back tariffs on Chinese imports.

Jones pointed out that the combination of high tariffs and the Federal Reserve’s reluctance to cut interest rates is putting significant pressure on the stock market.

He reportedly noted that even if Trump reduced tariffs to 50% or 40%, it would still amount to one of the largest tax increases since the 1960s, potentially slowing economic growth.

The billionaire investor also warned that unless the Fed adopts a more dovish stance and aggressively cuts rates, the market is likely to continue its downward trajectory.

He reportedly emphasised that the current economic conditions – marked by trade uncertainty and tight monetary policy – are not favourable for a stock market recovery.

Interestingly, Jones also expressed concerns about artificial intelligence, stating that AI poses an imminent threat to humanity within our lifetime.

Maybe AI will start running hedge funds too…?

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S&P 500 achieves longest winning streak in two decades – then slides

S&P 500 hits new record!

The S&P 500 has surged to a new record, marking nine consecutive days of gains – its longest winning streak since November 2004.

This run came after significant market falls after President Trump announced his tariffs on Liberation Day in April 2025.

The index closed 1.47% higher on the final day of the streak on Friday 2nd May 2025, reflecting investor optimism amid shifting global economic conditions.

This historic run comes as China and the U.S. signal the potential of renewed trade discussions, easing concerns over tariffs and supply chain disruptions.

Additionally, a strong U.S. jobs report has bolstered confidence, with employment figures exceeding expectations. The rally has been broad-based, with technology, financial, and industrial stocks leading the charge.

Despite the impressive streak, analysts warn of potential volatility ahead. While the S&P 500 has demonstrated resilience, market corrections often follow extended periods of gains.

S&P 500 all-time chart as of 5th May 2025 – 9-day consecutive run record

S&P 500 all-time chart as of 5th May 2025 – 9-day consecutive run record

Investors are now watching for signs of consolidation or further momentum and that is down to Trump’s tariffs and the Fed’s interest rate decision.

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U.S. Economy Contracts in Q1 2025 Amid Trade Policy Uncertainty

U.S. GDP

The U.S. economy shrank by 0.3% in the first quarter of 2025, marking the first contraction since early 2022.

The decline was largely driven by a surge in imports, which soared 41.3%, as businesses rushed to stockpile goods ahead of President Donald Trump’s newly imposed tariffs. Imports subtract from GDP calculations, contributing to the negative growth figure.

Despite the contraction, consumer spending remained positive, increasing 1.8%, though at a slower pace than previous quarters. Private domestic investment also saw a sharp rise of 21.9%, fueled by a 22.5% increase in equipment spending, likely influenced by tariff concerns.

The Federal Reserve faces a complex decision ahead of its upcoming policy meeting. While the negative GDP growth may push the central bank toward interest rate cuts, inflation remains a concern, with the U.S. Personal Consumption Expenditures (PCE) price index rising 3.6% for the quarter.

Markets reacted cautiously, with stock futures slipping and Treasury yields climbing. As the Trump administration navigates trade negotiations, economists warn that continued uncertainty could weigh on future growth prospects.

Next up, U.S. employment data.

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Shock but no ‘awe’ in Trump’s first 100 days in office

Sledgehammer policies

U.S. President Donald Trump has definitely brought a lot of shock in the first 100 days of his presidency, smashing trade links, alliances, and even his own government, but it can hardly be said to have left anybody truly in ‘awe’.

Donald Trump’s first 100 days in office during his second term have been a whirlwind of activity, marked by bold moves and significant controversy.

His poll rating is the lowest of any President of recent times for the first 100 days. It currently sits at around 41% (a CNN poll result suggests).

How does it compare?

Harry S. Truman, hit a rock-bottom approval rating of 22% in 1952. Other presidents like Richard Nixon and George W. Bush also dipped below 25%. But these were during their terms and not in the first 100 days.

His administration has focused heavily on reshaping trade policies, imposing tariffs that have disrupted global markets and strained relationships with long-standing allies.

Despite his claims of progress, no major trade deals have been finalised, leaving many questioning the effectiveness of his approach.

Legal challenges

Domestically, Trump’s policies have faced significant legal challenges, with numerous lawsuits filed against his administration. His stance on immigration and energy has sparked heated debates, reflecting the polarising nature of his decisions.

Trump’s ‘drill-baby-drill’ mantra has not had the desire reaction – oil prices has fallen with U.S. oil below $65 a barrel.

The automotive industry, for instance, has grappled with regulatory uncertainty and additional costs due to his tariffs, prompting him to soften some measures in response to industry concerns.

Internationally, Trump’s actions have raised concerns about U.S. credibility and stability. His hostile stance toward traditional allies, such as Canada, the EU and NATO, has left multi-decade relationships in tatters.

Meanwhile, his administration’s handling of the ongoing war in Ukraine and trade negotiations with China has drawn criticism for its lack of tangible results.

Despite these challenges, Trump remains confident in his vision for America. He has claimed progress in tariff negotiations with India, suggesting that a trade deal may be on the horizon.

No deals… yet

There has not been a single trade deal concluded with Trump’s administration – despite him reportedly claiming to have done ‘200 deals’ with only 195 countries in the world.

China is still striking a defiant tone on trade, and the war in Ukraine rages on. The president has also been forced to walk back on his “reciprocal tariffs.” 

However, his administration’s approach has left many wondering whether his first 100 days will be remembered for their impact or their controversy.

As the dust settles, the world watches closely to see how Trump’s policies will shape the future of the United States and its role on the global stage.

Trump may have wanted his first 100 days to be historic, and they were – but for all the wrong reasons.  

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Countries begin to turn away from the U.S. because of Trump’s tariff policies

U.S. tariffs crate uncertainty

Countries are increasingly pivoting away from the United States due to the ripple effects of former President Donald Trump’s tariff policies.

His ‘America First’ ideology, which prioritised domestic interests over international collaboration, assumed that the world needed America more than America needed the world. While this may have held true in certain aspects, the global response suggests otherwise.

Southeast Asian nations, heavily impacted by Trump’s tariffs, have begun strengthening intra-regional trade and diversifying their export destinations.

This shift reflects a growing desire to reduce reliance on the U.S. economy and mitigate the risks associated with its unpredictable trade policies.

Similarly, China, facing significant challenges from the U.S.-China trade war, has ramped up fiscal stimulus and expanded its markets beyond American borders. These moves highlight a strategic effort to counteract the economic pressures imposed by U.S. tariffs.

China has also introduced employment support and hinted at more stimulus as U.S. created trade war tension escalates.

The U.S. has increasingly found itself playing catch-up in critical areas like rare earth elements and minerals. The original U.S. tariff scope has already been adjusted and rolled back.

The 90-day tariff pause being one of them and the reduction of tech related tariffs another.

Trump’s recent executive order to jump-start deep-sea mining underscores America’s attempt to secure access to these strategically important resources, which China currently dominates.

However, this reactive approach may not be enough to recover from the damage already done and to regain lost ground may prove even harder still.

The unintended consequence of Trump’s policies is a more fragmented global trade landscape. Countries are taking measures to strengthen their own economies and reduce dependence on the U.S., potentially leaving America isolated in certain aspects of international affairs.

While the U.S. remains a major player in global trade, its unilateral actions have prompted other nations to explore alternative paths, reshaping the dynamics of global commerce.

This shift serves as a reminder that in an interconnected world, cooperation often yields better outcomes than isolationist policies.

The long-term implications of these changes are yet to fully unfold, but they signal a significant transformation in the global economic order.

Will the U.S. be the loser – or will it become even stronger in the world order?

It was already the world’s number one economy!

It’s not easy to unravel 100’s of years of interconnected world trade.

Why?

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Stock markets see three-day recovery as U.S. tech boost offsets trade worries – but for how long?

Tech gains

Global markets have shown resilience in the past three days, rebounding from recent downturns as technology stocks rally amid cautious optimism.

The boost in investor confidence follows strong earnings reports from major tech firms, highlighting their ability to weather economic uncertainty.

However, lingering concerns about international trade tensions raise questions about how sustainable this recovery truly is.

Technology stocks have led the charge, with companies in artificial intelligence, cloud computing, and semiconductor production posting better-than-expected growth figures.

Investors have flocked to these sectors, hoping that innovation will drive forward profitability even amid broader market volatility.

This renewed enthusiasm has helped offset concerns over ongoing global trade disputes, which have led to tariffs and economic slowdowns in key sectors such as manufacturing and consumer goods.

Yet, beneath this recovery, risks persist. Geopolitical uncertainties, including unresolved trade negotiations between major economies, continue to cast a shadow over financial markets.

Inflationary pressures, alongside tightening monetary policies by central banks, also threaten to cool investor enthusiasm. Analysts warn that without concrete progress on trade agreements; the rebound may be short-lived.

As investors weigh the competing forces of technological optimism and trade anxieties, the market remains in a delicate balance.

The question remains: Is this recovery a sign of renewed growth, or merely a temporary respite before further economic turbulence?

With the next wave of financial reports and policy decisions on the horizon, market makers will be closely monitoring whether the tech sector’s momentum can sustain broader economic confidence – or whether trade headwinds will ultimately pull markets back into uncertainty again.

Tech gains ground again


Stocks jumped Thursday 24th April 2024 thanks to strong gains in Mega Cap tech names.

The S&P 500 ended up 2.03%, while the tech-heavy Nasdaq Composite added 2.74%.

The S&P 500 index was able to exit correction territory, ending at least 10% above its recent low set in the wake of President Donald Trump’s 2nd April 2025 ‘liberation day’ tariffs.

For the S&P 500 to maintain its rapid exit from correction territory – it now has to witness Trump’s tariff walk-back and the ‘cooling’ of a potential Fed fight.

Trump seems to be the first to have ‘blinked’ on his self-imposed tariffs suggesting the tariffs are too high and will not go any higher – thy are high enough!

China has reportedly said there are no ‘ongoing’ trade talks?

The Dow Jones Industrial Average lagged the other two indexes but still added 1.23% and retook the 40,000 for the first time since 15th April 2025.

 Japan’s Nikkei 225 up almost 2% and leading gains.

Alphabet shares climb after better than expected results


Alphabet reported stronger-than-expected first-quarter growth on Thursday 24th April 2025.

Alphabet’s search and advertising units are still showing strong growth despite AI competition heating up, according to its first-quarter earnings report.

The company’s overall revenue grew 12% year-on-year, higher than the 10% Wall Street expected.

Shares rose more than 5% in after-hours trading. 

However, Alphabet reportedly indicated to expect ‘slight headwind’ to ads business this year.

Intel also posts results beat, but warns of tariff impact


Intel reported first-quarter results on 24th April 2025 that beat analysts’ estimates but also reportedly issued disappointing guidance. 

Second-quarter revenue will come in below estimates due to elevated uncertainty driven by the macro environment, the company warned.

Intel was reported saying that President Donald Trump’s tariffs and retaliation from other countries had increased the likelihood of a U.S. recession.

Big tech gains drive markets but the uncertainty surrounding Trump’s tariffs remain.

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Tesla and Musk struggle against Trump’s Tariff Tidalwave

Tesla

Tesla has been making headlines with a series of major developments, from financial setbacks to strategic shifts by CEO Elon Musk.

The electric vehicle giant recently reported a 20% drop in automotive revenue, a significant decline that has raised concerns among investors.

Meanwhile, Musk has announced that he will be spending much less time on the Department of Government Efficiency (DOGE), a move that could signal a renewed focus on Tesla.

Additionally, Tesla’s ambitious Optimus humanoid robot project has hit a roadblock due to China’s restrictions on rare earth materials, further complicating the company’s future plans.

Tesla’s Revenue Decline

Tesla’s first-quarter earnings report revealed a 20% drop in automotive revenue, with total revenue sliding 9% year-on-year.

The company attributed the decline to factory retooling for a refreshed Model Y, lower average selling prices, and increased sales incentives.

Net income plummeted 71%, reflecting the broader challenges Tesla faces in a competitive EV market.

Tesla 3 month share price chart 2025

The company has refrained from promising growth this year, stating that it will revisit its 2025 guidance in its Q2 update.

Musk’s Shift Away from DOGE

Elon Musk’s involvement in the Department of Government Efficiency (DOGE) has been a controversial topic, with critics arguing that his political commitments have distracted him from Tesla’s operations.

However, Musk has now confirmed that his time allocation to DOGE will drop significantly, allowing him to focus more on Tesla.

He stated that he will likely spend only one or two days per week on government matters, a shift that could reassure investors concerned about his divided attention.

Reports of his popularity in recent U.S. polls suggest he is out of favour with the American people and is now low in people’s opinion around the world because of his contentious DOGE role.

Optimus Robots and China’s Rare Earth Restrictions

Tesla’s Optimus humanoid robots, which Musk has touted as a revolutionary step toward automation, have encountered a major obstacle due to China’s export restrictions on rare earth materials.

The restrictions, imposed as part of an escalating trade war, have disrupted Tesla’s supply chain, particularly affecting the rare earth magnets used in Optimus actuators.

Musk has expressed hope that Tesla will secure an export licence, but the uncertainty surrounding the restrictions could delay production.

Looking Ahead

Tesla is navigating a challenging landscape, balancing financial setbacks, Musk’s shifting priorities, and geopolitical hurdles.

While the company remains a leader in EV innovation, its ability to adapt to market pressures and geopolitical challenges will be crucial in determining its future success.

Investors and industry watchers will be closely monitoring Tesla’s next moves as it works to regain momentum.

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U.S. stocks slide again as Trump publicly criticises Fed Chair Powell

Jerome Powell criticised

President Donald Trump’s recent criticism of Federal Reserve Chair Jerome Powell has sent shockwaves through the financial markets, reigniting concerns about the central bank’s independence.

On Monday 21st April 2025, Trump took to social media to publicly call Powell a ‘major loser’ and demanded immediate interest rate cuts, warning of an economic slowdown if his demands were not met.

This public rebuke, coupled with Trump’s earlier threats to terminate Powell, has unsettled investors and triggered another sharp sell-off in U.S. stocks.

The Dow Jones Industrial Average plunged nearly 1,000 points, or 2.48%, closing at 38170. The S&P 500 and Nasdaq Composite also suffered significant losses, falling 2.36% and 2.55%.

Dow Jones one-year chart

Dow Jones one-year chart

Trump continues to create uncertainty

Analysts attribute this market turmoil to fears that Trump’s rhetoric could undermine the Federal Reserve’s ability to operate independently, a cornerstone of its credibility.

‘Magnificent Seven’ tech companies dragged the major indexes lower, with Tesla and Nvidia respectively losing 5.8% and more than 4%. Amazon shed 3%, and Meta Platforms suffered losses too.

Tesla one-year chart

Tesla one-year chart

Adding to the uncertainty, Trump’s tariff policies have already strained investor confidence. The combination of trade tensions and doubts about the Fed’s autonomy has led to a flight from U.S. assets.

The dollar hit a three-year low, while gold prices soared to record highs above $3,400 per ounce as investors sought safe-haven assets.

Market experts warn that prolonged uncertainty could have far-reaching implications. ‘The market is okay with rates coming down,’ reportedly said Thierry Wizman, a global currency strategist. ‘What the market is not okay with is having the president or politicians tell the Fed that the rates need to come down’.

As Trump’s public rebuttal of Powell continues, investors observe the potential implications. The stakes are high, not just for the U.S. economy but for global markets that rely on the stability of American financial institutions.

Investors are left grappling with a volatile landscape, where political pressures and economic policies collide.

The Trump ‘turmoil’ continues.

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No tariffs for Russia?

Russia escapes Trumps tariffs

Russia’s exemption from recent U.S. tariffs has sparked curiosity and debate. While many nations face new trade duties, Russia remains notably absent from the list

This decision stems from a combination of geopolitical, economic, and strategic factors.

One key reason is the existing sanctions imposed on Russia by several countries, including the United States, following its invasion of Ukraine in 2022.

These sanctions have already significantly curtailed trade between Russia and its global partners, rendering additional tariffs less impactful.

For instance, U.S.-Russia trade has dwindled to a fraction of its pre-war levels, focusing primarily on strategic goods like fertilisers and chemicals.

Another factor is the ongoing diplomatic efforts to address the conflict in Ukraine. Some analysts suggest that exempting Russia from tariffs could be a strategic move to maintain a channel for negotiation and potential cooperation.

This approach might aim to encourage Russia’s participation in peace talks or other diplomatic initiatives.

Additionally, the structure of Russia’s exports plays a role. Certain goods, such as fertilisers, are critical to global supply chains, and imposing tariffs could disrupt markets and harm economies reliant on these imports.

While the decision has drawn criticism, it underscores the complexities of balancing economic policies with geopolitical realities.

The debate continues as the global community navigates these challenging dynamics caused through the imposition of U.S. tariffs.

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Tech driven sell-off gained at pace as Nasdaq dropped 3% and Dow Jones down 700 points

Tech in the red

The stock market experienced another sharp Trump tariff related downturn Wednesday 16th April 2025, driven by a tech-heavy sell-off continuing to rattle investors.

The Nasdaq Composite plunged by 3%, while the Dow Jones Industrial Average shed nearly 700 points, marking one of the most significant declines in recent months.

Concerns over tariffs and inflation were amplified by Federal Reserve Chair Jerome Powell’s remarks about the tariff uncertainty, which highlighted the challenging economic landscape.

Tech stocks bore the brunt of the sell-off, with semiconductor companies like Nvidia and AMD leading the decline. Nvidia’s announcement of a $5.5 billion quarterly charge related to export restrictions on its chips to China added to the sector’s woes.

The VanEck Semiconductor ETF dropped over 4%, reflecting broader uncertainty in the industry.

Powell’s comments on tariffs exacerbated market fears, as he warned of potential stagflation—a scenario where inflation rises while economic growth slows.

This sentiment was echoed across trading floors, with investors grappling with the implications of ongoing trade tensions and restrictive policies.

As the market inches closer to bear territory, the focus remains on navigating these turbulent times.

The sell-off underscores the fragility of investor confidence and the pivotal role of technology in shaping market dynamics

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Trump takes wrecking ball to global trade – sets stock markets on fire and plays golf – all in one week

Reckless tariffs

Is this a fair ‘take’ on the last weeks tariff turmoil?

President Trump’s tariffs have left a significant mark on global trade and financial markets, creating waves that continue to shape global economic dynamics.

The tariffs, initially aimed at reducing the U.S. trade deficit and protecting domestic industries, triggered a rollercoaster ride for stock markets and strained international relations.

Highs to lows

The Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 experienced sharp declines following the announcement of sweeping tariffs. At their lowest points, the Dow fell to 37226, the Nasdaq dropped to 15266, and the S&P 500 sank to 4956.

These figures marked significant losses, with trillions of dollars wiped off the market in just a few days.

The volatility was exacerbated by fears of a global trade war and the uncertainty surrounding the tariffs’ implementation.

Tariff turmoil and 90 day pause

In response to the market turmoil, President Trump announced a 90-day pause on most tariffs, providing temporary relief to investors and businesses. This decision led to a rebound in stock markets, with indices recovering some of their losses.

However, the relief was short-lived, as tensions with China escalated. While tariffs on many trading partners were paused, China’s tariff rate was increased to a staggering 125%.

This move further strained U.S.-China relations and added pressure on industries reliant on Chinese imports.

Tech garners favour

The tech sector, heavily dependent on global supply chains, was among the hardest hit. Tariffs on components like microchips and finished products such as smartphones and computers disrupted production and increased costs.

Companies faced challenges in maintaining profitability and passing on the increased costs to consumers. The eventual reduction and cancellation of some tariffs provided a lifeline to the tech industry, allowing businesses to stabilize operations and reduce prices.

However, the uncertainty surrounding trade policies continued to pose challenges for the sector.

Market turmoil?

Was this the ultimate in market ‘management’ as President Trump posted on his social media platform, Truth Social, that it was a ‘great time to buy’ just hours before announcing the 90-day tariff pause.?

This statement, made at 9:37 am., came shortly before the announcement, which caused stock markets to surge significantly. The timing of his post raised eyebrows and sparked discussions about potential insider trading concerns

China retaliates

China’s response to the tariffs was swift and retaliatory. Beijing imposed its own tariffs on U.S. imports, raising rates to 125%. This retaliation targeted key U.S. industries, including agriculture and technology, further escalating the trade conflict.

The Chinese yuan also hit its lowest level against the dollar since the global financial crisis. These measures highlighted the deepening economic rift between the world’s two largest economies.

The effects of President Trump’s tariffs underscore the complexities of modern trade policies. While intended to protect domestic industries, the tariffs created significant economic disruptions, both domestically and globally.

The stock market volatility, strained international relations, and challenges faced by industries like technology illustrate the far-reaching consequences of such policies.

As the world continues to navigate the aftermath of these tariffs, the importance of balanced and strategic trade policies becomes increasingly evident.

Markets moved up, unsurprisingly, after Trump announced the tech tariff adjustment

Over the weekend, President Trump reportedly made several statements about tariffs on tech products, creating some confusion.

Initially, it was announced that smartphones, computers, and other electronics would be temporarily excluded from the steep tariffs.

However, Trump later clarified that these products were not entirely exempt but had been moved to a different ‘tariff bucket.’ He reportedly stated that they would still face a 20% tariff as part of broader measures targeting Chinese goods.

Trump also hinted at upcoming tariffs on semiconductors and the entire electronics supply chain, emphasising the need for the U.S. to produce more of these components domestically.

President Trump reportedly described this as part of a ‘National Security Tariff Investigation’. These announcements have left tech companies and investors uncertain about the long-term implications for the industry.

Tariffs are like a spider’s web cast over the world with the spider, crawling around collecting from its prey.

Trump’s tariffs continue to ‘infect’ world trade, and they will be here for a while yet.

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Just a thought…

Fickleness of the stock market

Do you believe in the ‘collective unconscious’, a universal mind to which all humanity is connected?

In the context of the financial world, the stock market is based on unwavering fundamental mathematics… numbers. However, is often driven by sentiment, instinct, hopes and fears.

They both function in a similar manner.

In other words, it is essentially a sentiment tracker.

This was very evident in the stock market movement during ‘normal’ trading hours immediately preceding U.S. President Donald Trump’s tariff plan unveiling, contrasted with extended trading.

Investors had time to digest the sheer weight of the heavy tariffs on countries across the globe – we then witnessed an instant stock reversal after almost ‘normal’ trading before.

The point

Trump hinted at leniency on tariffs days before revealing his true intentions. However, that sense of mercy was absent, as the tariffs were sweeping and severe.

To describe Trump’s plan as a seismic shift in the economic and financial order might be understatement.

It will take time for tariff price changes to filter into the economy, but the stock market, reflecting the collective unconscious of investors, registered this shock instantly – just minutes after a stock climb.

That’s the markets for you.

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The end of globalisation or a fresh start with a new world order?

Global trade

Globalisation is a process that has woven the world together, creating interconnected networks of trade, culture, technology, and governance.

At its core, globalisation refers to the increased interaction and integration between people, companies, and governments across the globe.

This phenomenon has profound economic, political, and cultural implications, shaping the way we live and think.

Historically speaking

Historically, globalisation is not a recent occurrence; it has been evolving for centuries. The roots of globalisation can be traced back to ancient civilizations when trade routes like the Silk Road emerged around 130 BCE during the Han Dynasty of China.

The Silk Road connected Asia, the Middle East, Europe, and North Africa, facilitating the exchange of goods, ideas, religions, and innovations. While it was primarily a trade route, it also marked the first notable instances of cross-cultural interaction on a global scale.

However, the modern wave of globalisation began much later. Many historians point to the Age of Exploration in the late 15th and early 16th centuries as a pivotal moment.

European explorers like Christopher Columbus and Vasco da Gama sought new trade routes to Asia and the Americas, leading to the establishment of colonial empires.

These explorations were driven by ambitions of trade, wealth, and power, further intertwining economies and cultures.

Adam Smith, the 18th-century economist and philosopher, can also be credited with significantly influencing globalisation through his ideas. His seminal work, The Wealth of Nations (1776), laid the foundation for modern economics and advocated for free-market trade.

His philosophies supported the idea of open international markets, which became a cornerstone of globalisation in later years.

Industrial revolution

Fast forward to the 19th and 20th centuries, the Industrial Revolution and advancements in technology supercharged globalisation.

Railroads, steamships, telegraphs, and later airplanes and the internet, reduced distances and enhanced global connectivity.

This period also saw the establishment of international organisations such as the United Nations and the World Trade Organisation, further embedding globalisation into global policies.

Evolution

Today, globalisation continues to evolve. While it has brought unparalleled access to goods, services, and information, it has also sparked debates about its impact on inequality, environmental sustainability, and cultural homogenisation.

As nations and individuals grapple with its implications, globalisation remains a defining characteristic of our interconnected world. Its history is a testament to humanity’s constant quest to connect, collaborate, and innovate.

Tariffs

The introduction of ‘protectionist’ policies and ideals will likely lead back to globalisation in the end. Are Trump’s protectionist tariff ideals about protectionism or more about a drive to level the imbalance of global trade differences? Gobal trade will not end!

The tariffs are more about aiming to settle trade imbalances, at least according to U.S. President Trump.

Trump’s tariffs have had a significant impact on globalisation, challenging its trajectory. By imposing sweeping tariffs on imports, including a baseline 10% on goods from various countries, Trump aimed to reduce the U.S. trade deficit and reshore U.S. manufacturing.

While this approach sought to protect domestic industries, it disrupted global trade networks and raised concerns about inflation and economic instability.

These tariffs marked a shift away from decades of free trade policies that had fostered globalisation. Critics argue that such measures could lead to higher consumer prices and strained international relations.

On the other hand, proponents believe they might encourage self-reliance and industrial growth within the U.S.

The long-term effects on globalisation remain uncertain. While some see this as a step toward de-globalisation, others view it as a recalibration of trade dynamics.

The future will likely depend on how nations adapt to these changes and whether they seek collaboration or confrontation in global trade.

Globalisation is too big for it to simply… stop!

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Market pessimism – a contrarian’s opportunity?

Investing

The stock market is no stranger to volatility, and recent events have left investors grappling with uncertainty.

However, for those who embrace a contrarian mindset, the current wave of pessimism might just be the golden opportunity they’ve been waiting for.

Historically, extreme market pessimism has often preceded significant rebounds. The contrarian philosophy – buying when others are selling – rests on the belief that markets tend to overreact to negative news.

This overreaction creates opportunities for savvy investors to capitalise on undervalued assets.

Recent market turbulence, fueled by concerns over global trade policies and economic slowdowns, has pushed sentiment to new lows. Yet, history suggests that such moments of despair often mark the beginning of recovery.

For instance, during similar periods of heightened pessimism, indices like the S&P 500 have shown remarkable gains in subsequent months.

The last time stock investors were so pessimistic was in October 2023, and then the S&P 500 rose 19% over the next three months

While risks remain, including the potential for prolonged economic challenges, the contrarian approach offers a glimmer of hope. By focusing on long-term fundamentals and resisting the urge to follow the herd, investors may find themselves well-positioned to benefit from the market’s eventual rebound.

In the end, the key lies in patience and perspective. As the saying goes, ‘Fortune favours the bold’ – and in the world of investing, boldness often means going against the grain.

However, this market shock has been created by the introduction of Trump’s tariffs and the real unknown is just how far the U.S. President with push his tariff agenda.

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What’s a tariff?

Trump's tariffs

Some of the strangest locations affected by Trump’s tariffs include an uninhabited island near Antarctica?

U.S. President Donald Trump’s ‘reciprocal tariffs‘ hit major trading partners around the world, but some tiny islands and remote locations were also unlikely targets.

These ‘odd’ choices have cast doubt on the validity of the calculation used to fire off these tariff salvos.

President Donald Trump set a baseline tariff rate of 10% across the board, with a raft of levies affecting over 180 countries.

Meanwhile global markets, but especially U.S. stocks continue to tumble in a freefall rout!

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Russell 2000 goes into bear territory as Dow Jones – S&P 500 and Nasdaq hit correction!

Stocks fall

The Russell 2000, a key benchmark for small-cap U.S. stocks, has officially entered bear market territory.

This means the index has fallen more than 20% from its all-time high in late November 2024. The decline was accelerated by the recent rollout of President Donald Trump’s sweeping tariffs, which have raised concerns about rising costs, economic softening, and global supply chain disruptions3.

Small-cap stocks, which were initially seen as beneficiaries of Trump’s policies due to their domestic focus, are now facing significant challenges. Many of these companies are particularly vulnerable to input cost shocks and lack the financial flexibility of larger firms.

Analysts warn that the combination of higher costs and a slowing economy is squeezing profits, leaving small caps in a precarious position.

The Russell 2000’s downturn highlights the broader market volatility triggered by the tariff measures. While other major indices like the S&P 500 and Nasdaq are in correction territory, the Russell 2000 was the first to enter a bear market.

Russell 2000 index

Russell 2000 index

This development underscores the heightened risks for small-cap stocks in the current economic climate.

Despite the challenges, some strategists believe there could be opportunities for recovery, particularly if the Federal Reserve takes steps to cut interest rates.

However, Trump’s tariffs have introduced uncertainty into this policy, as inflation is likely to increase, casting doubt on the possibility of further interest rate cuts.

For now, the Russell 2000’s performance serves as a stark reminder of the delicate balance between protectionist policies and market stability.

The Russell 2000, a key benchmark for small-cap U.S. stocks, has officially entered bear market territory.

Dow Jones decline – the ripple effects of tariff policies

The Dow Jones Industrial Average has seen a sharp decline, falling from its all-time high of 45,073.63 points in December 2024 to its current level of 38,314.86 points—a drop of approximately 15%.

Dow Jones one-year chart

Dow Jones one-year chart

This downturn reflects a mix of economic challenges, including the impact of President Donald Trump’s tariff policies.

Trump’s sweeping tariffs, introduced as part of his ‘Liberation Day‘ initiative, aimed to bolster American manufacturing by imposing taxes on imported goods. While the policy sought to ‘level the playing field’, it triggered significant disruptions in global trade.

Retaliatory tariffs from key trading partners, including China and the European Union, compounded the issue, ultimately leading to higher costs for U.S. businesses and consumers.

The tariffs have also strained supply chains, particularly in industries reliant on international components. This has contributed to inflationary pressures, further dampening investor sentiment.

The tech sector, already grappling with regulatory scrutiny, has been hit hard, with companies facing increased production costs.

Nasdaq tech 100 one-year chart

Nasdaq tech 100 one-year chart

While some view the market’s decline as a natural correction, others warn of prolonged economic challenges, especially with the uncertainty surround Trump’s tariff agenda.

For investors, the key lies in navigating these turbulent times with caution and a focus on long-term fundamentals.

As the Dow adjusts to these pressures, its performance underscores the far-reaching consequences of trade policies on global markets.

S&P 500 one-year chart

S&P 500 one-year chart