After the US government announced new tariff policies on the 2nd, the US stock market experienced severe fluctuations. Following a significant decline on the 3rd, the three major indices of the New York Stock Market plummeted again on the 4th, with the NASDAQ Composite Index entering a bear market.
The three major indices of the New York Stock Market continued to fall on the 4th, and the NASDAQ entered a bear market.
On the 3rd local time, the three major indices of the New York Stock Market fell sharply, recording their largest single-day drop in about five years. Among them, the NASDAQ index fell nearly 6%. According to US media reports, on the 3rd, the total market value of the seven major US technology stocks evaporated by 1.03 trillion US dollars.
On the 4th, Wall Street fell again. By the closing bell, the Dow Jones Industrial Average fell 2,231.07 points from the previous trading day, closing at 38,314.86 points, a decline of 5.50%; the S&P 500 index fell 322.44 points, closing at 5,074.08 points, a decline of 5.97%; the NASDAQ Composite Index fell 962.82 points, closing at 15,587.79 points, a decline of 5.82%, down about 22% from its recent high.
In terms of sectors, all eleven sectors of the S&P 500 index fell on the 4th. The energy sector and financial sector led the declines with falls of 8.70% and 7.39% respectively, while the real estate sector had the smallest decline at 2.51%.
American CNBC reported that after China took countermeasures against Trump's so-called "reciprocal tariffs," people were concerned that the trade war would lead to a global economic recession, causing Wall Street to close sharply lower.
Trump Again Urges Interest Rate Cuts
On the 4th local time, US President Trump posted on the social media platform "Truth Social" that it was an excellent opportunity for Federal Reserve Chairman Powell to cut interest rates. Previously, Trump had repeatedly expressed his desire for the Fed to cut interest rates. On March 19, the Federal Reserve concluded its two-day monetary policy meeting and decided to maintain the federal funds rate target range between 4.25% and 4.50%. This decision drew dissatisfaction from Trump, who posted on social media on the same day saying that the Fed should cut interest rates because the impact of US tariffs was beginning to permeate the economy. On March 24, Trump again stated that he hoped the Fed would cut interest rates.
Powell Stays "On Hold"
Powell said that it is difficult to assess the potential economic impact of increased tariffs before there is greater certainty. However, the increase in tariffs is clearly much higher than expected, and the economic impact may be similar, including rising inflation and slowing economic growth. The scale and duration of these impacts remain uncertain. Powell said that it is "premature" to adjust monetary policy regarding tariffs.
Powell stated that President Trump's tariff policies could lead to rising unemployment and potentially rising inflation and slower economic growth. The US faces highly uncertain prospects, with high risks of rising unemployment and inflation. The Federal Reserve will assess the potential impact of changes in government policies, observe economic behavior, and formulate monetary policy in the way that best achieves the goals of the Federal Reserve's mission.
Powell was unwilling to reveal whether he believes the US economy is heading toward a recession, but he acknowledged that trade policy uncertainty is putting pressure on businesses, and an increasing number of forecasts indicate rising risks of an economic recession.
After Powell's speech, stocks fell.
Concerns Spread Across the United States
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With the severe fluctuations in the US stock market, concerns among all sectors of American society about the impact of tariffs on the US economy are spreading. Several Democratic senators warned that tariffs will bring disaster to the US economy.
Democratic Senator Richard Blumenthal of the United States believes that tariffs will push the US into a catastrophic economic recession, accompanied by disastrous price increases. Democratic Senator Tina Smith said that tariffs will have a chain reaction, bringing very complex and serious impacts to each supply chain.
"The US Becomes the Biggest Loser in the Market"
Reuters reported on the 4th that the US tariff policy will create the most serious trade barriers in over a century. US consumers may face comprehensive price increases across various categories of goods. Bloomberg reported on the 3rd with the headline "US Becomes the Biggest Loser in the Market under Trump's Tariff Policy," stating that the US government's tariff policy has disrupted the global trade system, but its damage to US assets exceeds that of many large economies subject to additional tariffs.
Economic analysts also pointed out that the new US tariff policy brings a lot of uncertainty to businesses and consumers, having an adverse impact on the US economy.
Increased Costs Will Be Passed on to Consumers
Many practitioners in various industries in the US said that the new tariff policies proposed by the US government will lead to increased costs, which will ultimately be passed on to consumers.
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In Mandeville, Louisiana, the owner of a French bakery said that the new tariff policy has caused an increase in the cost of imported flour, which is troubling him. He has no choice but to make a choice: either stop importing flour from France or pass the cost onto consumers.
The flower industry also faced rising prices. Most flowers in the US are imported from countries like Colombia and Ecuador, and the new tariff policy will directly raise the wholesale price of flowers.
At a flower market in San Francisco, the shop owner purchasing flowers expressed concern about the new tariff policy. In recent years, flower prices have been continuously rising, and she fears that the purchase price will increase. To maintain her income, she will have to raise prices for customers.
(Source: CCTV News)
Original article: https://www.toutiao.com/article/7489609307688944140/
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