President Donald Trump’s tariffs led to volatility in global markets, with U.S. government borrowing costs surging and stocks experiencing choppy trading as China retaliated with tariffs. Despite some gains in stock indexes, investors are wary of the volatility and the potential for a bear market. The disruption in the government bond market raised concerns about financial stability, prompting speculation of a possible intervention by the Federal Reserve. The combination of falling stocks and rising bond yields has raised fears of a full-blown financial crisis, with former Treasury Secretary Lawrence Summers comparing the situation to a problematic emerging market.
Despite these concerns, the White House is standing firm, with Trump planning to impose additional tariffs on pharmaceutical products. He urged businesses to move their operations to the U.S., highlighting the benefits of zero tariffs and quick approvals. Treasury Secretary Scott Bessent downplayed worries about rising borrowing costs and dismissed China’s retaliatory measures.
The uncertainty caused by Trump’s tariffs has already led to two major U.S. firms, Walmart and Delta Air Lines, withdrawing earnings guidance. Walmart cited the need to maintain low prices, which could impact profits, while Delta Air Lines criticized Trump’s approach. The ongoing trade war and the market volatility it has sparked are causing widespread concern among investors and analysts.
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