Wall Street tumbles over tariff war

[Rogue Trader]

Wall Street tumbles over recession fears wiping billions in US tech stock valuations

Wall Street tumbles over recession fears wiping billions in US tech stock valuations · Euronews
Tina Teng
4 min read

Recession fears mounted as the global trade war escalated following a series of US tariffs and retaliatory measures taken by China and Canada last week. Wall Street tumbled on Monday, with the tech-heavy index Nasdaq shedding 4%- the biggest single-day loss since 2022- wiping off $1.1 trillion (€710 billion) in market valuation.

Big US Tech stocks tumble​

The Magnificent Seven stocks led the broad market decline, as US President Donald Trump’s aggressive tariffs raised concerns over profit margins, increasing price barriers for tech giants. “The markets are now also contending with the risk of weaker earnings from slower growth and eroded margins from the higher costs created by tariffs,” Kyle Rodd, a senior market analyst at Compital.com Australia, wrote in an email.

Among these big US tech stocks, Tesla is the biggest loser, plunging 15% on Monday. The electric vehicle maker’s stocks more than halved from its all-time high in mid-December last year, erasing all the gains, partially due to a backlash caused by CEO Elon Musk’s political evolvement.

In the first two months, Tesla’s EV sales plunged 71% in Germany and 44% in France. Meanwhile, its autonomous driving may face a delay in receiving approval in China due to trade conflicts with the US. The investment bank UBS has downgraded the outlook for Tesla’s car deliveries for 2025.

Other big tech names, including Nvidia, Apple, Microsoft, Alphabet, Meta Platforms, and Amazon, all fell between 2% and 5%. In the S&P 500, the technology sector fell more than 4%, leading to a 2.7% slump in the benchmark to a nearly six-month low. The Dow Jones Industrial Average slid nearly 900 points, or 2.08%, erasing all the gains since Trump won the election.

Trump sees “a period of transition” in the US economy​

During an interview with Fox News on Sunday, Trump acknowledged that the US economy may be “in a period of transition” when asked if he was expecting a recession this year. “I hate to predict things like that,” he said, “There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America.” He also hinted at the possibility of higher tariffs following the implementation of reciprocal tariffs on 2 April.

At a joint address to Congress last Tuesday, Trump downplayed the potential economic and market impact of his tariff policies: “There’ll be a little disturbance, but we are okay with that. It won’t be much.”

US government bonds expect a sooner rate cut​

However, market participants are expecting a significant economic impact from a widening global trade war. Bond traders are now betting on a sooner Fed rate cut in June this year, much earlier than previously projected September. The interest rate-sensitive 2-year US government bond yield fell 13 basis points to 3.86%, the lowest since October 2024.
Government bond yields, also known as Treasuries in the US, reflect expectations for the change of interest rates. Treasury yields have been declining after peaking in mid-January due to deteriorating economic outlooks amid Trump’s tariffs and his aggressive Federal job cuts. The Federal Reserve

Bank of Atlanta forecasts negative economic growth during the first quarter in the US, primarily driven by a decline in net exports.

Implications on the euro and the European stock markets​

The pair of EUR/USD rose to 1.0854 at 4:30 CET on Tuesday, erasing all the losses since 5 November on the US election day. The euro may continue strengthening against the dollar due to the divergent movements of the government bond yields on both sides of the Atlantic markets.

 

[Rogue Trader]

US stock market loses $5 trillion in value as Trump ploughs ahead on tariffs​

Traders working on the floor of the New York Stock Exchange in New York City.PHOTO: AFP

UPDATED Mar 11, 2025, 11:49 AM


NEW YORK - US President Donald Trump’s tariffs have spooked investors, with fears of an economic downturn driving a stock market sell-off that has wiped out US$4 trillion (S$5.3 trillion) from the S&P 500’s peak in February, when Wall Street was cheering much of Mr Trump’s agenda.

US stock market loses $5 trillion in value as Trump ploughs ahead on tariffs​

Traders working on the floor of the New York Stock Exchange in New York City.PHOTO: AFP

UPDATED Mar 11, 2025, 11:49 AM

​

NEW YORK - US President Donald Trump’s tariffs have spooked investors, with fears of an economic downturn driving a stock market sell-off that has wiped out US$4 trillion (S$5.3 trillion) from the S&P 500’s peak in February, when Wall Street was cheering much of Mr Trump’s agenda.
A barrage of new Trump policies has increased uncertainty for businesses, consumers and investors, notably back-and-forth tariff moves against major trading partners such as Canada, Mexico and China.

“We’ve seen clearly a big sentiment shift,” said Ms Ayako Yoshioka, senior investment strategist at Wealth Enhancement. “A lot of what has worked is not working now.”A barrage of new Trump policies has increased uncertainty for businesses, consumers and investors, notably back-and-forth tariff moves against major trading partners such as Canada, Mexico and China.
“We’ve seen clearly a big sentiment shift,” said Ms Ayako Yoshioka, senior investment strategist at Wealth Enhancement. “A lot of what has worked is not working now.”
The stock market sell-off deepened on March 10, with the benchmark S&P 500 charting its biggest daily drop – around 2.7 per cent – of the year.

The Nasdaq Composite posted its largest one-day decline since September 2022.

Apple and Nvidia both fell about 5 per cent, and Tesla tumbled 15 per cent.The stock market sell-off deepened on March 10, with the benchmark S&P 500 charting its biggest daily drop – around 2.7 per cent – of the year.
The Nasdaq Composite posted its largest one-day decline since September 2022.
Apple and Nvidia both fell about 5 per cent, and Tesla tumbled 15 per cent.
The S&P 500 on March 10 closed down 8.6 per cent from its Feb 19 record high, nearing a 10 per cent decline that would represent a correction for the index.


The tech-heavy Nasdaq ended March 6 down more than 10 per cent from its December high, weighed down by megacap technology and tech-related stocks that have struggled so far in 2025.

Mr Trump over the weekend declined to predict whether the US could face a recession as investors worried about the impact of his trade policy.The S&P 500 on March 10 closed down 8.6 per cent from its Feb 19 record high, nearing a 10 per cent decline that would represent a correction for the index.

The tech-heavy Nasdaq ended March 6 down more than 10 per cent from its December high, weighed down by megacap technology and tech-related stocks that have struggled so far in 2025.
Mr Trump over the weekend declined to predict whether the US could face a recession as investors worried about the impact of his trade policy.

Beyond the tariff uncertainty, investors are watching to see if lawmakers can pass a funding Bill to avert a partial federal government shutdown, while a crucial report on inflation looms on March 12.

“The Trump administration seems a little more accepting of the idea that they’re okay with the market falling, and they’re potentially even okay with a recession in order to exact their broader goals,” said Mr Ross Mayfield, investment strategist at Baird. “I think that’s a big wake-up call for Wall Street.”Beyond the tariff uncertainty, investors are watching to see if lawmakers can pass a funding Bill to avert a partial federal government shutdown, while a crucial report on inflation looms on March 12.
“The Trump administration seems a little more accepting of the idea that they’re okay with the market falling, and they’re potentially even okay with a recession in order to exact their broader goals,” said Mr Ross Mayfield, investment strategist at Baird. “I think that’s a big wake-up call for Wall Street.”

Other risk assets were also punished, with Bitcoin dropping 5 per cent.

Some defensive areas of the market held up better, with the utilities sector and US government debt seeing more demand.

The S&P 500 has given up all gains recorded since Mr Trump’s Nov 5 election, and it is down nearly 3 per cent in that time.

Hedge funds reduced their exposure to stocks on March 7 at the largest amount in more than two years, according to a Goldman Sachs note released on March 10.Other risk assets were also punished, with Bitcoin dropping 5 per cent.
Some defensive areas of the market held up better, with the utilities sector and US government debt seeing more demand.
The S&P 500 has given up all gains recorded since Mr Trump’s Nov 5 election, and it is down nearly 3 per cent in that time.
Hedge funds reduced their exposure to stocks on March 7 at the largest amount in more than two years, according to a Goldman Sachs note released on March 10.

Investors had expressed optimism that Mr Trump’s expected pro-growth agenda including tax cuts and deregulation would benefit stocks, but uncertainty over tariffs and other changes, including federal workforce cuts, has dampened sentiment.

“It was the overwhelming consensus that everything was going to be this great environment once President Trump came into office,” said Mr Michael O’Rourke, chief market strategist at JonesTrading.

“Every time you have structural change you’re going to have uncertainty and you’re going to have friction,” Mr O’Rourke said. “It’s understandable people are starting to be a little concerned and starting to take profits.”

Investors’ equity positioning has fallen in recent weeks, dipping to slightly underweight for the first time since briefly hitting that level in August, Deutsche Bank analysts said in a note on March 7.

A further retreat to the bottom of the historic range for equities weighting, as seen during Mr Trump’s US-China trade war in 2018-2019, could drag the S&P 500 to as low as 5,300, or down another 5.5 per cent from current levels, they added.

In another sign of growing investor unease, the Cboe Volatility index – colloquially known as Wall Street’s “fear gauge” – on March 10 reached its highest closing level since August.

The administration is “still trying to figure out how to define a win politically, economically, and what is the right timeframe”, said Mr Edward Al-Hussainy, senior interest rate and currency analyst at Columbia Threadneedle Investments. “And until they do that, it’s going to be like this every week.” REUTERSInvestors had expressed optimism that Mr Trump’s expected pro-growth agenda including tax cuts and deregulation would benefit stocks, but uncertainty over tariffs and other changes, including federal workforce cuts, has dampened sentiment.
“It was the overwhelming consensus that everything was going to be this great environment once President Trump came into office,” said Mr Michael O’Rourke, chief market strategist at JonesTrading.
“Every time you have structural change you’re going to have uncertainty and you’re going to have friction,” Mr O’Rourke said. “It’s understandable people are starting to be a little concerned and starting to take profits.”
Investors’ equity positioning has fallen in recent weeks, dipping to slightly underweight for the first time since briefly hitting that level in August, Deutsche Bank analysts said in a note on March 7.
A further retreat to the bottom of the historic range for equities weighting, as seen during Mr Trump’s US-China trade war in 2018-2019, could drag the S&P 500 to as low as 5,300, or down another 5.5 per cent from current levels, they added.
In another sign of growing investor unease, the Cboe Volatility index – colloquially known as Wall Street’s “fear gauge” – on March 10 reached its highest closing level since August.
The administration is “still trying to figure out how to define a win politically, economically, and what is the right timeframe”, said Mr Edward Al-Hussainy, senior interest rate and currency analyst at Columbia Threadneedle Investments. “And until they do that, it’s going to be like this every week.” REUTERS

 

[Rogue Trader]

 

[Eisenhut]

Warren Buffet already sold , close shop liao

 

[Willamshakespear]

1. If Humankind still does not know that $1.7Trillion DON'T simply vanish into thin air, they must be sleeping. The money just went into:-

i)cash hidden pillows at home which will be target for robbers.

ii) Kept in banks, either gathering dust or be loaned out by banks to earn interests for payment to depositors.

iii) kept in safe havens such as US Treasury bonds.



2. The fallout from Tariffs imposed is real. evident by the fall in stocks.

a)HOWEVER, it will be the IMPORTER companies that will suffer as investors would lose confidence in dividend earnings. It will either be the importers whom will pay for the tariffs, mostly 10-15% to be absorbed in order to sell their goods at the same price, or costs passed on to customers, losing customer base & market share.


b)For EXPORTING companies such as in USA, it does not just sell its goods to China, Mexico, EU & Canada alone, which anyway has trade deficits. It sells such goods to the World of 196 nations.

Furthermore, with tax breaks for manufacturing in USA, such companies would be sustainable, coupled with US banks FLUSHED with cash to loan out to them for expansion thereby creating jobs for those on American shores.

Ultimately, those tariffs do not go into an individual's personal pocket, but are revenues into the US Treasury to be used for social expenditures such as healthcare, education, infrastructure, research & development, etc, etc.

 

[Willamshakespear]

As for the fall in Tech stocks, it is mainly driven by the chip wars, as new & better chip advancements are made almost monthly by leaps & bounds. No investor would want to buy an outdated chip in their industries or personal devices. Thus chip manufacturers would have to either reinvent or rejuvenate their manufacturing processes, plans, target markets & sales.

As for Tesla, which earns mostly from the sale of its EV cars, they will need to just simply ditched their screen display units & go for the traditional knobs that are far safer to use on a drive, as well as get a better designer for its current boxy & flat car shape - protrusions & extrusions are the trend now, which China had adopted from sports models for its own car designs, which are awesome to look at, although not sure about its internal designs....