Stocks slide on the eve of Trump’s tariff announcement

(NEW YORK) — U.S. stocks teetered in early trading on Wednesday, posting shaky performance amid an escalating global trade war and concerns about a possible recession.

After some initial modest gains, the Dow Jones Industrial Average fell 330 points, or 0.8%, while the S&P 500 dropped 0.25%. The tech-heavy Nasdaq ticked up 0.25%.

Trading opened minutes after a fresh inflation report showed price increases had eased more than expected in February, the first full month under President Donald Trump.

Tit-for-tat tariffs continued to rattle global trade early Wednesday, however.

Trump’s 25% tariffs on all imported steel and aluminum products went into effect overnight. In response, Canada and the European Union slapped retaliatory duties on U.S. goods.

Tesla, the electric carmaker run by Elon Musk, soared about 6% in early trading on Wednesday. The gains came a day after Trump touted the company alongside Musk in an event at the White House.

Some economists say that while the U.S. tariffs could boost the local steel industry in the United States, they could also lead to higher prices for industries that purchase steel. Those higher prices may eventually reach consumers.

The U.S. relies heavily on imported aluminum and those costs are expected go up as well.

This is a developing story. Please check back for updates.

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(NEW YORK) — President Donald Trump’s tariffs sent stocks tumbling in recent weeks, but the uncertainty helped propel a different asset viewed as a safe haven: gold.

The price of gold topped $3,000 per ounce for the first time ever last week, and the precious metal continued to hover around that mark in early trading on Monday.

Gold prices have soared 12% so far this year, while the S&P 500 has plummeted nearly 7%. Over that period, the Dow Jones Industrial Average has dropped 2% and the tech-heavy Nasdaq has tumbled 8.5%.

The rush toward gold makes financial sense, experts said. The asset offers investors a hedge against uncertain stock performance, since gold prices often display a degree of independence from movements in equities markets.

However, gold prices carry volatility of their own, some experts added, especially when buyers enter the market at a high point, risking losses instead of providing a security blanket.
“Investors need to be careful,” Campbell Harvey, a professor at Duke’s Fuqua School of Business who studies commodity prices, told ABC News.

“At a time of heightened uncertainty, people look toward a safe haven – and gold is a perceived safe haven. But most people don’t realize that gold is volatile,” Harvey added.

The run-up in gold prices comes amid a market slump set off by an escalating global trade war.

Last week, the S&P 500 closed down more than 10% since its high in February, meaning the decline officially qualified as a market correction. It marked the index’s first correction since October 2023. At the same time, the Dow suffered its worst one-week drop-off since 2023.

“Right now, it’s a very anxious marketplace,” Jim Wyckoff, senior market analyst at Kitco Metals, told ABC News. “That’s been a detriment for stock-market bulls and a boom for gold-market bulls.”

The flight to gold in moments of market crisis draws on decades of evidence, according to an analysis co-authored by Harvey in 2020. The price of gold moved higher during seven of the last nine major stock market selloffs stretching back to the late 1980s, researchers found.

“It’s a good track record, but it’s not a sure thing,” Harvey said. “Even though it went up seven out of nine of these drawdown periods, that doesn’t mean it will be seven out of nine in the next nine drawdowns.”

Last week, Paris-based financial firm BNP Paribas raised its forecast for gold prices, predicting the precious metal would exceed $3,100 an ounce. The company attributed the rosy outlook to economic uncertainty incited by Trump, but it warned such gains would likely fizzle out by the second half of this year.

“The gold market will price in or normalize Trump-driven trade risks, as it typically does with geopolitical risk,” BNP Paribas said in a report shared with ABC News. “Thus, if there is no ongoing escalation in trade tensions, gold prices will, in our view, struggle to maintain further upside momentum.”

Some experts who spoke to ABC News acknowledged the current price boom may eventually lose steam, but they still encouraged investors to add the precious metal to their portfolios as a means of offsetting the heightened risk of stocks.

“Gold offers diversification,” Trevor Yates, an analyst at investment firm Global X, told ABC News. “We see gold warranting a place in the portfolio.”

Investors who add gold for the sake of diversifying their portfolio, however, may want to add other assets alongside it, such as Treasury bonds or real estate, Harvey said.

“There are other safe assets besides gold,” Harvey said. “Don’t put all of your eggs in one basket.”

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(NEW YORK) — With more high-rise buildings than anywhere else in the U.S., New York City has long been a place where millions of people hope to achieve the American dream through careers in the construction industry.

While scores of construction workers are spending hours each day building the city’s newest apartment buildings, office towers and restaurants from the ground up, these properties have also become the locations of the city’s latest fraud scheme, according to some representatives of the construction and insurance industries.

“It isn’t a victimless crime,” Don Orlando of Tradesman Program Managers, which represents property owners and construction contractors, told ABC News. “These are small businesses that are getting victimized.”

Orlando alleges that hundreds of construction site incidents involving reported injuries were actually staged as part of a widespread conspiracy — and he said surveillance cameras are capturing some of these alleged fraudulent falls.

He pointed to a video that he says shows a man who “didn’t fall” and “just sat down” while an ambulance was on its way. The man filed a lawsuit claiming head and limb injuries, according to Orlando.

“That $200 or $300 investment in that camera saved that employer millions of dollars,” Orlando said.

Others said these claims are being blown out of proportion.

“If there was this rampant fraud going on, these cases would be dismissed by a judge or a jury,” New York personal injury attorney Nicholas Warywoda told ABC News. “That’s just not happening.”

‘The cost of doing work skyrockets’

Steve Katz has worked in the construction industry in the New York metropolitan area for more than 50 years, but said the last few years have been unlike anything he has ever experienced.

According to Katz, his concerns over fraud started eight years ago when one of his employees claimed to have fallen from a fire escape. After doctors said the employee was fine and could return to work, the man never came back, according to Katz, adding that his insurance company settled for $3.6 million.

“That’s when I went crazy,” Katz said. “I found out that I wasn’t the only one. My competitors told me they were all getting hit with these fake falls.”

Two years later, Katz said another construction worker sued him, alleging a fall on one of the properties where Katz’s crews were working. However, Katz said the employee’s colleagues told him that the employee told them that he was planning the fall in advance and was willing to teach them how to fake falls as well.

“Since then, I’ve had a total of eight of these phony lawsuits,” Katz said, adding that the extensive costs associated with fraudulent claims are being passed along to customers.

“We just raise our rates. The insurance companies raise their rates, and the cost of doing work skyrockets.”

Orlando explained that fraudulent construction accident cases can have financial implications for insurance customers throughout the U.S., even outside the nation’s largest city.

“If this was true, then why are the insurance companies not showing the proof that it’s actually lawsuits that are raising premiums and insurance costs?” Warywoda, whose firm frequently represents construction workers injured on construction sites in New York, said.

“One could say if the owners of the construction sites would just provide the appropriate safety measures that they’re required to, there wouldn’t be as many lawsuits,” he added.

One address, multiple lawsuits

Allegations of widespread fraud have caused increased scrutiny on lawsuits being filed by people claiming to be construction workers who were hurt on job sites.

In New York City’s outer boroughs, miles from the high-rise towers of Midtown Manhattan, reporting by ABC station WABC-TV found some claims coming from multiple people living at the same address.

One apartment building in the Bronx was home to 30 plaintiffs, while a two-story building nearby was listed as the home of 21 plaintiffs, according to WABC-TV’s report. In Queens, at least half a dozen people living in a six-unit apartment building said in court documents that they were injured on the job at construction sites.

“If you think about it, the law of averages tells you it’s really unlikely that there’s going to be this large number of people living at the same address, who are all in the same business, work for the same employer, have the same injury, have the same medical treatment and are going through the exact same things,” Michelle Rafield, the executive editor for Coalition Against Insurance Fraud, told ABC News.

Orlando’s company, Tradesman, claimed undocumented migrants are being recruited to participate in the scheme.

“They’re told, ‘Listen, we can teach you how to make millions. This is all you have to do. You have to fake a fall on a construction site,'” Katz said.

Katz and Orlando claim that some doctors and lawyers are in on the scheme, and that after the construction accidents are reported, the migrants undergo unnecessary surgeries and then become plaintiffs in slip-and-fall lawsuits

“I would call the plaintiffs in this case victims, because they are the ones being taken advantage of,” Orlando said.

Tradesman has now filed lawsuits of its own, taking over 100 defendants, including law firms and doctors, to federal court on accusations of racketeering.

“It’s morally wrong,” Orlando said. “Take out the fraud element. You’re taking advantage of someone who’s deprived as it is, and America is supposed to be the land of opportunities.”

Attorneys for dozens of the defendants say the allegations have no merit and that they intend to seek dismissals of the claims against them.

“The insurance industry and the industry lobby is very wealthy and very strong. They’re doing everything they can to tarnish and to change the civil justice system, which is only going to make it less safe for construction workers,” Warywoda, who isn’t among those accused in Trademan’s lawsuits, said. “It’s about putting profits over people.”

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