Global Stock Markets Drop After Trump’s Tariff Threats, Fed Governor Dismissal
(MENAFN) Global stock markets slid into the red on Tuesday following a series of provocative statements from US President Donald Trump, which included the dismissal of Federal Reserve Governor Lisa Cook and new threats of tariffs targeting China.
In a dramatic move on Monday, Trump announced that Cook had been removed from her post over accusations of mortgage fraud. The abrupt dismissal has sparked concerns about the growing political influence on the Federal Reserve, which many see as undermining the central bank's independence.
On the trade front, Trump signaled he would impose additional tariffs on countries levying digital services taxes unless these measures are reversed. He also threatened to restrict the export of US technology and chips to nations that implement such taxes.
Trump did not stop there, accusing China of withholding magnets from the US and warning that such a move could result in a “200% tariff or something.”
The developments sent shockwaves through the markets, with the New York Stock Exchange experiencing a sell-off on Monday. The S&P 500 index dropped by 0.43%, while the Nasdaq and Dow Jones Industrial Average saw declines of 0.22% and 0.77%, respectively.
The timing of Trump’s announcement, which came after the US market closed, also affected investor sentiment. By 0615GMT Tuesday, the US 10-year Treasury yield stood at 4.3%, and US index futures suggested further losses.
Gold prices, however, edged up, trading at $3,377 per ounce, a 0.3% increase, as investors sought safe-haven assets amidst mounting concerns over the Fed's autonomy.
The US dollar index strengthened, closing 0.6% higher at 98.3 on Monday and edging up further to 98.4 by Tuesday morning.
European markets echoed the negative sentiment seen in the US, with stocks trending lower on both Monday and Tuesday. In Asia, the mood was similarly bearish. Trump’s criticism of Chinese magnet exports reignited fears of escalating trade tensions, although Beijing has yet to respond.
In Japan, the Nikkei 225 index dropped 0.87%, while in China, the Shanghai Composite fell by 0.2%. The Hang Seng in Hong Kong was down by 0.2%, and South Korea’s Kospi ended the day 0.9% lower.
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