By Alex Financials

Stock markets experienced significant declines, driven by escalating trade tensions and new export restrictions. The S&P 500 fell 3.1%, the Dow Jones Industrial Average dropped 859 points, and the Nasdaq Composite declined 4.3%. These losses were exacerbated by Federal Reserve Chair Jerome Powell’s warning that President Donald Trump’s tariffs could reduce economic growth and increase inflation more than previously anticipated.​

Tech Sector Hit Hard by Export Restrictions

Technology companies bore the brunt of the market downturn. Nvidia ($NVDA) shares plunged 8.8% after the company reported that U.S. export restrictions to China could cost it $5.5 billion. Advanced Micro Devices ($AMD) and ASML Holding ($ASML) also reported significant projected losses due to the trade barriers.​

Global Trade Tensions Escalate

The market turmoil follows President Trump’s recent announcement of the “Liberation Day” tariffs, which impose a baseline 10% tariff on all imports, with higher rates for certain countries. These measures have led to retaliatory actions from China, including suspending Boeing aircraft deliveries and mail services to the U.S., disrupting Tesla’s production plans.​

Investors Seek Safe Havens

In response to the escalating trade war, investors have turned to traditional safe-haven assets. Gold prices surged to a record high above $3,300 per ounce, and the U.S. dollar weakened against other major currencies.​

Outlook and Considerations

The current market volatility underscores the significant impact of geopolitical tensions on global financial markets. Investors are advised to monitor developments closely, particularly regarding trade policies and their implications for multinational corporations.