US stock futures slump amid escalating tariff fallout
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(NEW YORK) — Stock markets continued their slide on Friday morning, as the shockwaves of President Donald Trump’s “Liberation Day” tariffs continued to reverberate around the globe.
U.S. stock futures slipped further, with Dow Jones futures plummeting nearly 1,100 points — or 2.68% — on Friday morning. S&P 500 futures slid 137.5 points or 2.53% and NASDAQ futures were down 510.25 points or 2.73%.
Global markets gave early signals of the difficult to come on Friday. Japan’s Nikkei index lost 3.5% on Friday, while the broader Japanese Topix index fell 4.45%.
In South Korea, the KOSPI index was down 1.7%, with the country grappling with both Trump’s tariffs and the news that South Korea’s Constitutional Court upheld the impeachment of President Yoon Suk Yeol.
Indian investors joined the sell-off on Friday, with the Nifty 50 and BSE Sensex indexes both falling more than 1%. India’s stock markets had previously performed better than others thanks to lower tariffs than competitors like China, Indonesia and Vietnam.
Australia’s S&P/ASX, meanwhile, continued its slide into Friday with another 2% drop taking the index to an 8-month low.
In Europe, too, stock markets fell upon opening. Britain’s FTSE 100 index dropped more than 1%, Germany’s DAX fell 0.75%, France’s CAC lost 0.9% and Spain’s IBEX slipped 1.4%.
Trump’s Wednesday announcement of tariffs on nearly all American trade partners sent U.S. and foreign markets alike into a tailspin.
All three major American stock markets closed down on Thursday, marking their worst day since June 2020 during the COVID-19 pandemic.
The NASDAQ fell 6%, the S&P 500 4.8% and the Dow Jones nearly 4%.
Major companies were among those struggling. Nike plummeted 14% while Apple fell 9%. E-commerce giant Amazon slid nearly 9%.
Shares fell for each of the other so-called “Magnificent Seven,” a group of large tech firms that helped drive stock market gains in recent years.
Meta, the parent company of Facebook and Instagram, dropped nearly 9%. Chipmaker Nvidia slid 7%.
Tesla, the electric carmaker led by Trump-advisor Elon Musk, declined 5%.
Shares of U.S. retailers that depend largely on imported products also tumbled, with Dollar Tree down 13% and Five Below seeing 27% losses..
ABC News’ Leah Sarnoff, Max Zahn, Victor Ordoñez and Zunaira Zaki contributed to this report.
Annabelle Gordon for The Washington Post via Getty Images
(NEW YORK) — Price hikes for gasoline and groceries could reach shoppers within days in the aftermath of tariffs imposed by the Trump administration, experts told ABC News.
Some products such as auto fuel and fresh produce will be hit with near-instant price increases, while others like cars, laptops and children’s toys will show hikes in the coming weeks and months, they said.
The Trump administration imposed 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on imports from China. The fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China last month.
Mexico, Canada and China make up the three largest U.S. trading partners, accounting for a vast array of products ranging from everyday essentials to big-ticket purchases.
Tariffs of this magnitude would likely increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers, experts said.
“Higher tariffs will translate into higher prices for some products very quickly,” Mark Zandi, chief economist at Moody’s Analytics, told ABC News. “It will take longer for everything from vehicles to appliances to consumer electronics.”
In a series of social media posts last month, Trump said he would place tariffs on Canada, Mexico and China for hosting the manufacture and transport of illicit drugs that end up in the U.S.
During an address to a joint session of Congress on Tuesday night, Trump also sharply criticized tariffs imposed on U.S. goods by Canada, Mexico and China.
“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement on Tuesday.
The U.S. imported $38.5 billion in agricultural goods from Mexico in 2023, making it the top recipient of such products, U.S Department of Agriculture data showed. Those imports include more than $3 billion worth of fresh fruits and vegetables.
Roughly 90% of avocados eaten in the U.S. last year originated in Mexico, USDA data showed. Other products with a high concentration of Mexican imports include tomatoes, cucumbers, bell peppers, jalapeños, limes and mangos.
These products will show price increases within days because fresh produce cannot be held on shelves for an extended period, meaning imports slapped with tariffs will soon reach shoppers, Jason Miller, a professor of supply chain management at Michigan State University, told ABC News.
“That’s what you’d expect to be hit the fastest,” Miller said.
A similar dynamic will play out for gasoline prices for some U.S. drivers living in regions that rely on crude oil from Mexico and Canada, said Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry.
Mexico and Canada account for 70% of U.S. crude oil imports, which make up a key input for the nation’s gasoline supply, according to the U.S. Energy Information Administration, a government agency.
Those imports come primarily from Canada, which sends crude oil to U.S. refineries built specifically to process the crude and redistribute it as gasoline for cars and trucks. Gasoline that originates as Canadian crude reaches customers in the upper Midwest as well as some along the East and West coasts, Fitzgerald said.
Gas refiners and retailers retain the ability to alter prices multiple times per day, meaning price hikes may have hit some drivers as early as Tuesday, he added.
“Think about a digital board at a gas station – a couple taps to a button and the price goes up,” Fitzgerald said.
A second wave of price increases will hit a wide-ranging set of products over the coming weeks and months, some experts said.
A large share of consumer electronics – such as laptops, video game systems and smartphones – enter the U.S. from China, meaning the new tariffs will filter through into higher prices for those goods, they said.
Price hikes will ultimately hit children’s toys, since many of those products also originate in China, Miller said.
Some U.S. retailers appear to have been stockpiling children’s toys in anticipation of the tariffs, but the stored items will run out soon, he added.
“You probably don’t get much of a reprieve beyond April,” Miller said.
Prices for Mexico-made beer and tequila will also rise over the coming months, as will the cost of Canada-made maple syrup, Miller added.
Canada is the top source of imported U.S. eggs, adding stress to a supply chain already decimated by an avian flu outbreak.
Egg prices skyrocketed 53% over the past year, U.S. Bureau of Labor Statistics data showed last month.
Since the U.S. relies overwhelmingly on domestic egg production, however, a potential price increase for Canadian eggs is not expected to meaningfully drive up egg prices at U.S. stores, Miller said.
“But it certainly doesn’t make things better,” Miller added.
ABC News’ Jacob Eufemia contributed to this report.
(WASHINGTON) — The Federal Reserve held interest rates steady on Wednesday, just days after President Donald Trump called on the central bank to lower them.
The announcement put the central bank on a potential collision course with Trump, though a longstanding norm of independence typically insulates the Fed from direct political interference.
The decision to maintain the current level of interest rates pauses a series of three consecutive interest rate cuts imposed by the Fed over the final months of 2024.
The Federal Open Market Committee (FOMC), a policymaking body at the Fed, said on Wednesday that the central bank remains attentive to concerns centered on the potential for both a rise in unemployment and a surge of inflation. Inflation stands at a moderately elevated rate, while unemployment remains at a historically low level, the FOMC added.
Taken together, those two considerations — employment and inflation — make up the Fed’s “dual mandate.”
“The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance,” the FOMC said.
“The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.”
The Fed indicated last month that it would cut interest rates at a slower pace than it had previously forecast, however, pointing to a bout of resurgent inflation. That forecast sent stock prices plummeting, though markets have broadly recovered the losses.
Inflation has slowed dramatically from a peak of more than 9% in June 2022, but price increases remain nearly a percentage point higher than the Fed’s target rate of 2%.
During a virtual address to the World Economic Forum in Davos, Switzerland, last week, Trump demanded a drop in interest rates after calling for a reduction of oil prices set by a group of nations known as OPEC, which includes Saudi Arabia.
The prospect of low oil prices will enable the Fed to dial back its fight against inflation and bring down interest rates, Trump said.
“I’m going to ask Saudi Arabia and OPEC to bring down the cost of oil,” Trump said, later adding: “With oil prices going down, I’ll demand that interest rates drop immediately.”
The U.S. does not belong to OPEC, nor does the president play a role in the organization’s decisions regarding the price of oil sold by its member states.
Several past presidents have sought to influence the Fed’s interest rate policy, including Trump, who repeatedly spoke out in favor of low interest rates during his first term.
On the campaign trail in August, Trump said a U.S. president should have a role in setting interest rates.
Fed Chair Jerome Powell struck a defiant tone in November when posed with the question of whether he would resign from his position if asked by Trump.
“No,” Powell told reporters assembled at a press conference in Washington, D.C., blocks away from the White House.
When asked whether Trump could fire or demote him, Powell stated: “Not permitted under the law.”
The Fed retreated in its fight against inflation over the final months of last year, lowering interest rates by a percentage point. Still, the Fed’s interest rate remains at a historically high level of between 4.25% and 4.5%.
Last month, Powell said the central bank may proceed at a slower pace with future rate cuts, in part because it has now lowered interest rates a substantial amount.
Powell also said a recent resurgence of inflation influenced the Fed’s expectations, noting that some policymakers considered uncertainty tied to potential policy changes under Trump.
“It’s common-sense thinking that when the path is uncertain, you get a little slower,” Powell said. “It’s not unlike driving on a foggy night or walking around in a dark room full of furniture.”
(NEW YORK) — With the clock ticking on TikTok’s deadline to sell or face a ban in the U.S., the battle to buy the app has intensified.
Amazon has now sent a letter to the Trump administration to join the bidding war for TikTok, sources told ABC News.
President Donald Trump said over the weekend there are lots of potential buyers and said he’d like to keep the app alive. The administration has set an April 5 deadline for the app to be banned if it is not sold by it’s Chinese-owned parent company, ByteDance.
On Wednesday, Trump and senior administration officials considered multiple proposals. It’s unclear if a decision has been made on how to move forward.
The mobile tech company AppLovin and a group including tech giant Oracle have also made bids to buy the app. Even if Trump approves a deal, China will still need to sign off on it.
Trump has said publicly that if an agreement isn’t reached by the deadline, he will just extend it.
This is a developing story. Please check back for updates.
