As traders anxiously awaited US President Donald Trump’s next tariff actions and fretted over inflation and interest rates, US stock markets fell and gold reached a new high on Tuesday. As oil prices rose, European and Asian stock markets could not find their way.
By approving steel and aluminium tariffs and threatening additional actions, Trump has fulfilled his campaign promises to return to his tough trade diplomacy. Stocks have held up since Trump took office, even though the actions have shocked sentiment. Analysts say the measures have not been as harsh as initially anticipated.
However, while traders wait for the following White House pronouncement, caution still hangs over trading floors. Hong Kong and Shanghai saw declines as Asian markets found it difficult to sustain the momentum from Monday. While Paris slightly increased and London decreased, Frankfurt’s DAX 40 index achieved a new record above 22,000 points in Europe.
Russ Mould, investment director at AJ Bell, stated that for tariffs to be successful, “the administration needs to keep everyone guessing and this creates uncertainty for financial markets. It is evident that the administration is ready to impose tariffs instead of merely employing them as a negotiating tool,” he continued.
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