Markets across the United States and around the world have been rocked by the latest escalation in trade tensions, with President Donald Trump’s tariffs sending shockwaves through global equities.
The Dow Jones Industrial Average tumbled for a second straight day, shedding another 670 points, or 1.6%, bringing its two-day losses to over 1,300 points. The S&P 500 also fell 1.2%, while the Nasdaq Composite slipped 0.3% after an initial plunge of more than 2%.
At the heart of the turmoil—new 25% tariffs on imports from Canada and Mexico, as well as an additional 10% levy on Chinese goods. These moves triggered swift retaliatory measures, with China imposing new tariffs of up to 15% on certain U.S. products. Canada and Mexico have also pledged countermeasures, with Mexico expected to announce its response later this week.
Investor sentiment has turned sharply negative, with traders pulling back from stocks linked to global trade. Automakers were hit hard—General Motors and Ford both fell, while companies reliant on imported goods, such as Target and Chipotle, also took a hit. Bank and retail stocks led the market lower, as concerns mount over the potential drag on economic growth.
With the tariffs now in effect, focus is shifting to Washington, where all eyes are on President Trump’s upcoming address to Congress. Markets will be listening closely for any indication of whether these tariffs are here to stay—or if a resolution remains possible.
Meanwhile, the fallout has spread beyond U.S. markets. Global stocks fell, and traders are now pricing in a faster-than-expected interest rate cut from the Federal Reserve as concerns over a slowdown intensify. The S&P 500’s losses have erased its gains for 2025, and investor sentiment remains firmly in “extreme fear” territory.
Turning to Australia, the ASX is set for a rough start tomorrow following Wall Street’s volatile session. Futures indicate a 70 point fall at the open as markets react to the deepening trade war. While the Australian economy is less directly exposed, commodity prices and export-dependent sectors are bracing for potential knock-on effects.
