Stocks slide globally as investors digest Trump’s new tariffs. Analysts warn that the worst hasn’t arrived yet
- Global stocks have slipped after President Trump’s new tariff announcement, S&P 500 futures have fallen by nearly 1%, with major indexes all over the world falling. Analysts warn that the true impact of these tariffs will collide with the US economy in the coming months through higher costs for businesses and consumers. Import taxes are currently the highest since the 1930s.
The S&P 500 futures fell nearly 1% this morning before the opening bell, and stocks around the world have also fallen as investors digest the first day of President Trump’s latest tariff regime.
It’s just a short-term response. The real impact of the tariffs will not arrive in the US for several months, analysts warn.
According to Deutsche Bank, today’s selling is negative, but muted. “The US tariff rate rose to around 15% after just surpassing the 2% at the beginning of the year. That’s the highest level since the 1930s, but this year’s US stocks have become much stronger and not prevent other markets from becoming much stronger,” Jim Reed and his team told clients this morning.
(Kospi in South Korea has now reached a staggering 3.9% today, but most of it was due to a new set of taxes on businesses and investors announced by the government.
Nevertheless, analysts are pessimistic this morning. Even the good news is being greeted with a light dad. For example, Apple provided a stellar Q2 revenue call last night. “Apple surprised investors with results that were contrary to seasonal trends, showing a significant acceleration in the company’s total revenue growth,” Jpmorgan’s Samik Chatterjee told clients. Stocks rose 2% temporarily in overnight trading, but have fallen 17% since the start of the year. why? Customs duty for one reason. CEO Tim Cook told investors that tariffs are expected to cost the company $1.1 billion in the next quarter. Tariffs (and other issues) wiped out $700 billion from Apple’s market capitalization this year.
“Psychologically (Trump’s new import tax system) is simply making investors a needle with the greatest fear. He told the Financial Times.
That’s the main problem with Wall Street. These additional fees will now appear in the real world for the next few months and by 2026.
“Japan’s data shows that US tariffs have had an overall negative impact on exports,” said Min Joo Kang of Ing this morning. “Japanese exporters appeared to have offset the impact of tariffs by lowering prices, but ultimately they could pass costs to consumers, delaying US price pressure.”
UBS’s Paul Donovan said: “The global economy is echoing with the dull sound of taxation sloping on the shoulders of US consumers. These taxes will not appear in consumer baskets with full force until January next year.”
There are two other drawback risks to note.
- Today we’ll get the latest job number (non-farm payroll). According to Goldman Sachs’ Ronnie Walker and Jessica Rindels, consensus expectations have added 105,000 jobs, down below the three-month average of 150,000.
- Personal consumption spending is weaker, according to Samuel Tombs and Oliver Allen of Pantheon Macroeconomics. “Expenses have already slowed sharply since last year, and June spending levels are not higher than December. We expect spending to remain stagnant for the rest of the year as we step on the water amid soft labor market and inflation rates of commodity,” they said.
There are no prizes to speculate where that “product inflation” comes from.
Here is a snapshot of the action before the New York Opening Bell:
- S&P 500 Futures This morning, it fell 1% before the market price after the index fell 0.37% yesterday.
- Stoxx Europe 600 Early trading saw a 1.21% decrease.
- UK FTSE 100 Early trading saw a 0.55% decrease.
- Japan Nikkei 225 A decrease of 0.66%.
- China’s CSI 300 A decrease of 0.51%.
- South Korea Kospi A 3.88% decrease.
- India’s Nifty 50 It has decreased by 0.5%.
- Bitcoin It fell to $114K.