Wall Street Rallies Despite Trade War Tensions: A Surge Amidst Retaliatory Tariffs
Wall Street kicked off a new trading day on a positive note this Wednesday, with the New York Stock Exchange witnessing a rise in its main index, the Dow Jones Industrial Average, which gained approximately 100 points, translating to an increase of 0.29%. This upward movement in US markets followed China’s announcement of retaliatory tariffs on American products, marking a fresh escalation in the ongoing trade war between the two nations.
Just ten minutes after the market opened, the S&P 500 index reflected gains of 0.57%, reaching 5010 points, while the tech-heavy Nasdaq saw a more robust surge of 1.27%, landing at 15461 points.
Amidst this backdrop, recession forecasts are starting to gain traction. Several major executives from companies listed on Wall Street are anticipating a downturn in the US economy. Among the 30 stocks that compose the Dow Jones, significant gains were observed in notable companies such as Walmart, which rose by 3.88%, Apple at 3.54%, and Nvidia with an increase of 3.33%. In contrast, the largest declines were recorded for Merck, down by 2.56%, Johnson & Johnson falling by 2.53%, and Amgen dropping by 2.13%.
By sector, the most considerable losses were seen in real estate with a 1.61% decline and energy down by 1.36%. On the other hand, technology stocks gained 2.15%, and nonessential goods rose by 1.32%.
Turning to the commodities market, Texas crude oil prices fell by $4.57, settling at $56.86 per barrel, a price that hasn't been recorded in more than five years. The decline came just as China announced on Wednesday that it would increase tariffs on US goods from 34% to 84%. This was in direct response to an additional 50% tax imposed by Donald Trump the day before, which ultimately raised the total tariffs on Chinese goods to an overwhelming 104%.
The Finance Ministry of China has issued a statement revealing that the new tax rates will come into effect on April 10. This move is seen as a reaction to the United States’ continuous missteps in increasing tariffs on Chinese imports.
Furthermore, the European Union has approved countermeasures proposed by the European Commission to combat the 25% tariffs imposed by the US on steel and aluminum. As of Wednesday, a 20% increase in tariffs on EU products imported to the US has taken effect, impacting nearly 20% of all foreign trade in the world’s largest consumer economy. This shift could significantly affect the automotive, machinery, and pharmaceutical sectors.
The reciprocal tariffs adopted today are designed to replace the previously established 10% global tariff that took effect on April 5, which also affected other key trading partners of the United States like China, Japan, and South Korea.
In light of these developments, President Donald Trump attempted to inspire optimism among investors via a brief post on his Truth Social network, declaring, "IT’S A GREAT TIME TO BUY." This message arrived following four consecutive days of losses for Wall Street and global markets, as investors grappled with the unsettling impacts of the trade war and the retaliatory actions from China and Canada.
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