Wall Street weakened on Monday while investors around the world became more skeptical of American investments, which many economists suggest are due to the trade war of US President Donald Trump and his continuous criticism of the federal reserve.
The S&P 500 sank 2.4% in another paper. This pulled the 16% index below its record set two months ago.
The industrial average of Dow Jones fell 971 points, or 2.5%, while losses for Tesla and Nvidia helped to drag the Nasdaq composite down 2.6%.
In Canada, the main composite index S&P / TSX fell 0.76% today.
Perhaps more worrying, US government obligations and the value of the US dollar also sank while prices retired to the US markets. It is an unusual decision because the value of the American treasures and the dollar has historically strengthened during episodes of nervousness. This time, however, experts say that it is directly from Washington policies that cause fear and potentially weaken their reputation as some of the safest investments in the world.
Trump maintained his difficult speech on world trade on Monday while economists and investors continue to say that his proposed prices could cause a recession if they are not behind. US discussions last week with Japan failed to conclude a quick agreement that could reduce prices and protect the economy, and they are considered a “test case”, according to Thierry Wizman, strategist at Macquarie.
“The golden rule of negotiation and success: the one who has gold makes the rules,” wrote Trump in all capital letters on his social network of truth. He also said that “businessmen who criticize the prices are bad in business, but really bad in politics”, the same in all ceilings.
Investors from around the world increase alarms after a third day of chaos on the tariffs, with a billionaire ally, even warning that not backing up on prices could release an “ self-induced economic nuclear winter. “
Trump recently focused on China, the second world economy, which also maintained its rhetoric. China has warned other countries on Monday to conclude trade agreements with the United States “to the detriment of the interest of China” while Japan, South Korea and others are trying to negotiate agreements.
“If this happens, China will never accept it and resolutely take countermeasures in a reciprocal way,” the Chinese Ministry of Commerce said in a statement.
The market is also suspended about Trump’s anger towards the president of the federal reserve Jerome Powell. Trump last week again criticized Powell for not having reduced interest rates earlier to give more juice to the economy.
The Fed has resisted the drop in rates too quickly because it does not want to allow inflation to reset after
Raising almost until its two percent lens, going from more than nine percent three years ago.
Trump too Powell referenced in an article on social networks On Monday afternoon, when he published an upcoming slowdown for the American economy “unless Mr. Too late, a large loser, reduces interest rates, now”.
A Trump’s decision to shoot Powell would probably send a flash of fear through the financial markets. While Wall Street likes lower rates, largely because they increase stock prices, the greatest concern would be that a less independent Fed would not be as effective in keeping inflation under control. Experts fear that such a decision can weaken, if not kill, the reputation of the United States as the safest place in the world to keep money.
All striking pillars of uncertainty at the center of financial markets mean that some investors say they have to rethink
The fundamental principles of the way of investing.
“We can no longer extrapolate past trends or rely on long -term hypotheses for anchoring wallets,” said Strateges of BlackRock Investment Institute in a report. “The distinction between the allocation of tactical and strategic assets is vague. Instead, we must constantly reassess the long -term trajectory and be dynamic with the allocation of assets when we learn more about the future state of the global system.”
This could in turn push investors outside the United States to keep more of their money in their original markets, according to the strategists led by Jean Boivin.
Big Tech leads gout
In Wall Street, Big Tech’s shares have helped reduce indices down before their latest profits that later this week.
Tesla sank 5.7%. The stock of the electric vehicle has more than half of its record established in December on the criticism that its stock market has become too high and that its brand has become too hidden with Elon Musk, which leads the efforts of the US government to reduce expenses.
The NVIDIA flea manufacturer fell 4.5% for a third consecutive decline after revealing that the US export limits on china can harm its first quarter results of $ 5.5 billion. They led another wiping at Wall Street and 92% of the shares of the S&P 500 fell.
Among the rare winners were financial services and Capital One Financial, which climbed after the United States government approved their proposed merger. Discover an increase of 3.6%, while Capital One added 1.5%.
The current18:49What does stock market chaos mean for your money?
Trump’s world prices have triggered a collapse of the stock market, leaving many Canadians worried about their investments, their pensions – and what all this means for the cost of daily living. The guest animator Mark Kelley breaks down how it will affect ordinary Canadians with the Senior Journalist of the CBC, Peter Armstrong, and the economist Armine Yalnizyan.
Gold has also climbed to burn his investment reputation safely, unlike others.
On the bond market, short -term American treasury yields have dropped because investors expect the FED to reduces its main interest rate overnight later this year to support the economy.
But longer-term yields have increased with doubts about the United States’s position in the world economy. The yield on the 10-year treasure increased to 4.40%, compared to 4.34% at the end of last week and around 4% earlier this month. It is a substantial decision for the bond market.
The value of the US dollar, on the other hand, fell against the euro, the Japanese yen, the Swiss franc and other currencies. The Canadian dollar exchanged for 72.36 cents too, against 72.17 cents on Thursday.
