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Stock markets worldwide remained on alert Wednesday (April 2) as investors braced for US President Donald Trump’s much-anticipated tariff announcement. Set for April 2 (April 3 in India), the announcement is expected to unveil sweeping trade measures that could impact global trade, inflation, corporate earnings, and Federal Reserve policy.
While uncertainty loomed, US markets posted modest gains, Asian markets saw a mixed close, and European stocks slipped as investors remained cautious ahead of the announcement.
Wall Street inches higher ahead of tariff details
US stock indexes advanced on Wednesday as traders attempted to price in the potential economic fallout from Trump's tariff plans. Market volatility has been high in recent weeks, with investors speculating on the scale of the proposed measures.
Dow Jones Industrial Average: up 59.50 points (+0.14%) to 42,049.46.
Nasdaq Composite: gaining 73.95 points (+0.42%) at 17,523.84.
S&P 500: rising 14.35 points (+0.25%) to 5,647.42.
Technology and consumer stocks lead the gains, while defensive sectors remain mixed. Investors are also weighing the potential inflationary impact of tariffs on the Federal Reserve’s interest rate trajectory.
"The market has been pricing in these tariffs for weeks," said Phil Pecsok, founder and chief investment officer of Anacapa Advisors, reported Reuters. "The question now is how severe they will be and whether we see retaliatory actions from other countries."
Asian markets trade mixed as investors assess risks
Asian markets saw mixed movements as traders evaluated the potential economic impact of Trump’s tariff plans.
Nikkei 225: up 0.28% at 35,725.87, supported by export-driven stocks.
S&P BSE Sensex: rising 0.78% to 76,617.44, boosted by gains in financials and IT stocks.
Hang Seng: down 0.02% at 23,202.53, weighed by concerns over China's economic slowdown.
Japan’s market found support from a stable yen, while Indian equities extended gains on positive earnings sentiment. However, Hong Kong’s Hang Seng remained under pressure amid ongoing concerns about China’s recovery.
European markets slip as caution prevails
European stocks traded lower as investors adopted a cautious stance ahead of the tariff announcement, with trade-sensitive sectors facing pressure.
FTSE 100: down 0.30% at 8,608.48, as financials and mining stocks decline.
DAX: falling 0.66% to 22,390.84, weighed down by auto stocks.
CAC 40: losing 0.22% at 7,858.83, as industrial stocks slip.
Germany’s DAX was under particular pressure, with automakers bracing for potential US import duties. London’s FTSE 100 also faced weakness, although defensive consumer staples stocks provided some support.
Key concerns for global markets
The key focus remains on the specifics of Trump’s tariff plan, including which sectors will be affected and whether the measures will prompt retaliation from trade partners.
As part of his economic plan, Trump is set to announce new tariffs today at 4 PM ET (1:30 AM IST). These include reciprocal tariffs on countries such as India, China, Brazil, Japan, and the European Union.
While the specifics remain undisclosed, Trump has previously suggested matching the tariffs imposed on US exports. Proposals under consideration include a 25% tariff on all imports from Canada and Mexico, in addition to the already announced 20% tariff on Chinese imports, a 25% tariff on all steel and aluminum imports, and a 10% tariff on energy imports from Canada.
A day before the Liberation Day deadline, White House Press Secretary Karoline Leavitt criticised the Indian government for imposing a 100% tariff on American agricultural goods.
Investors are also assessing how tariffs could impact inflation and monetary policy. A sharp rise in import costs could complicate expectations of Federal Reserve rate cuts, potentially keeping borrowing costs higher for longer.
With Trump set to make his tariff announcement shortly, markets are expected to remain volatile. Any signs of exemptions or negotiation flexibility could calm investors, while broad, immediate tariffs could trigger sharp market swings.
Stay tuned to our blog for real-time updates on Trump’s Reciprocal Tariffs announcement.
