US stocks open little changed amid tariff uncertainty
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(NEW YORK) — U.S. stocks opened muted on Tuesday, a day after President Donald Trump signaled a willingness to ease some tariffs but also impose new ones.
The Dow Jones Industrial Average ticked up 71 points, or 0.1%. The S&P 500 climbed 0.1%, while the tech-heavy Nasdaq increased 0.05%.
Trump’s administration said on Friday that many consumer electronics would be exempt from his wide-ranging reciprocal tariffs, an announcement that sent global markets higher on Monday.
Trump on Monday also signaled a willingness to further ease tariffs, saying he is looking to “help some of the car companies” in the aftermath of 25% auto levies.
The White House also took steps on Monday that may result in new tariffs on pharmaceuticals and semiconductors, posting notices online about national security investigations into those products.
Markets in Europe also traded higher midday on Tuesday, after European Commission President Ursula von der Leyen’s 90-day pause on planned tariff countermeasures went into effect.
Germany’s DAX climbed about 1.21% midday and Britain’s FTSE 100 traded up about 0.90% midday.
South Korea’s KOSPI index closed up 0.88% on Tuesday, posting its second day of gains. And Tokyo’s Nikkei 225 climbed 0.84%.
Markets in China, where Trump’s reciprocal tariffs are still in place, showed less enthusiasm. Shanghai’s Composite Index rose just 0.15% and Hong Kong’s Hang Seng Index climbed 0.23%.
ABC News’ David Brennan contributed to this report.
(NEW YORK) — As the world reels from tariffs instituted by the Trump administration, stock markets are widely in decline.
On Friday, U.S. stock saw the worst decline since the COVID-19 pandemic began in 2020. But the declines last week did not rank among the worst crashes in the history of the U.S. stock markets.
President Donald Trump said Sunday, “I don’t want anything to go down, but sometimes you have to take medicine to fix something and we have such a horrible — we have been treated so badly by other countries because we had stupid leadership that allowed this to happen.”
Here are the worst declines in the history of the Dow Jones Industrial Average by percentage:
5.) March 12, 2020 (-2,352.60, -9.99%)
Four days before the worst COVID-related drop in stocks, the Dow slid 9.99%. Blue chip stocks also dropped 7.79% — the 14th-worst all-time — on March 9, the first day of the COVID-induced drops.
4.) Oct. 29, 1929 (-30.57, -11.73%)
The stock market crash of October 1929 signaled the end of the “Roaring Twenties” and the beginning of the Great Depression. This was the second day of the big drop, known as “Black Tuesday,” which began one day earlier and occupies the next spot on this list.
3.) Oct. 28, 1929 (-38.33, -12.82%)
The first Black Monday in the history of the Dow Jones, investors’ fortunes were wiped out in a major wake-up call for people who thought the the good times would last forever.
2.) March 16, 2020 (-2,997.10, -12.93%)
Many Americans can recall the crash that happened as the world was shutting down over the COVID-19 pandemic. The worldwide shutdowns and disruptions to the global supply chain caused investors to bail.
1.) Oct. 19, 1987 (-508, -22.61%)
Black Monday, or the first contemporary global financial crisis according to the Federal Reserve, followed seven months of explosive growth on Wall Street. Stocks had climbed 44% over those months, according to the Fed, before the U.S. announced a larger-than-expected trade deficit. After moderate losses in the week before, the global markets tanked and Monday opened to panic from U.S. investors as well.
Note: The Dow Jones officially considers Dec. 12, 1914, the worst day in trading history, but economists agree 1987’s Black Monday was the worst. The stock market closed in July 1914 due to the start of World War I, and wouldn’t open again until Dec. 12, 1914. Even then, it was on a limited basis, with the official return to full trading on April 1, 1915. Technically, the Dow actually went up on Dec. 12, 1914, but a retroactive correction makes it look like it went down.
(WASHINGTON) — President Donald Trump’s decision to pause so-called “reciprocal tariffs” for most countries triggered a historic stock market rally on Wednesday, but the levies that remain in place are still expected to hike prices and put the U.S. at risk of a recession, experts told ABC News.
Alongside the suspension of some tariffs, Trump increased duties on Chinese goods to a total of 145%, marking a significant escalation of a trade war between the two largest economies in the world.
Stock markets plunged on Thursday as investors digested Trump’s tariff announcement, slashing roughly half of the previous day’s rally.
The high tariffs on China, the third-largest U.S. trade partner, are expected to raise prices for an array of widely used products, including smartphones, shoes, clothes and video game systems, experts said.
Plus, experts added, the extra costs for U.S. shoppers and a general sense of policy uncertainty increases the likelihood of an economic downturn.
“China is not the only country we trade with but they are an important trading partner for a lot of goods,” Christopher Conlon, a professor of economics at New York University who studies trade, told ABC News.
Even after Trump paused some tariffs, U.S. consumers face an average effective tariff rate of 25.2%, the highest since 1909, the Yale Budget Lab found in report on Thursday. An effective tariff rate factors in the impact of tariffs on imports of finished goods as well as inputs used by domestic firms.
In addition to the tariffs on Chinese goods, the White House kept in place an across-the-board tariff of 10% on nearly all imports. The U.S. also continues to impose 25% levies on foreign autos, aluminum and steel.
Goods from Mexico and Canada face tariffs of 25%, though the measure excludes products covered under the United States-Mexico-Canada Agreement, or USMCA.
Current tariffs are expected to hike prices by an additional 2.7% in 2025, costing consumers on average about $4,400 per household over that time, the Yale Budget Lab said.
“Higher tariffs will push prices up significantly over the next year or so,” Preston Caldwell, chief U.S. economist at Morningstar, told ABC News in a statement on Thursday.
On Thursday, the White House said U.S. tariffs on China stand at 145%, more than the 125% levy that had been widely reported a day earlier.
At the previous tariff level of 125% for Chinese goods, the cost of a nearly $60 car seat would’ve increased an average of $132.75 for a new price of about $192, according to the left-leaning Center for American Progress, or CAP. A Playstation 5 video game system, meanwhile, would’ve increased $623.75 for a new price of roughly $1,122, CAP found.
Under the current 145% tariffs, those price increases would rise further.
Smartphone prices are also expected to rise, experts said. China accounted for more than four of every five of smartphones imported into the U.S. last year, S&P Global said in a note to clients on Thursday.
Experts told ABC News they anticipate price hikes will coincide with an elevated risk of a recession.
They pointed to risks of a slowdown for businesses mired in higher tax costs, as well as a shopping slump as consumers curtail spending to pad their savings to help weather price increases and a possible economic downturn.
“It was encouraging to see the President reverse himself on the so-called “reciprocal” tariffs yesterday, but I wouldn’t take much solace in it as the global trade war continues to rage,” Mark Zandi, chief economist at Moody’s Analytics, said in a post on X. “I still put the odds of a recession this year at 60%.”
The view echoed a note J.P.Morgan sent to clients hours after Trump’s tariff pause on Wednesday.
“The drag from trade policy is likely to be somewhat less than before, and thus the prospect of a recession is a closer call,” J.P.Morgan said. “However, we still think a contraction in real activity later this year is more likely than not.”
For now, the economy remains in solid shape by several key measures.
The unemployment rate stands at a historically low level. Meanwhile, inflation cooled in March, putting price increases well below a peak attained in 2022, fresh data on Thursday showed.
Meanwhile, hiring surged in March, blowing past economists’ expectations and accelerating job growth from the previous month.
Conlon, of New York University, said the likelihood of a recession eased after Trump’s tariff pause but the risk of a downturn remains elevated.
“A lot of the permanent disruption and damage has been done, mostly because you’ll see consumers and companies react to this uncertainty by pulling back,” Conlon said. “People will be way less likely to go out and make big-ticket purchases because of recession fears and that can be self-perpetuating.”
(NEW YORK) — U.S. stocks dropped on Tuesday, extending losses suffered a day earlier amid a fresh round of tariffs on Canada and concern about a possible recession.
The Dow Jones Industrial Average tumbled about 515 points, or 1.2%, while the S&P 500 fell 0.8%. The tech-heavy Nasdaq ticked down 0.4%.
The Tuesday selloff extended a days-long market decline touched off by U.S. tariffs imposed last week on Canada, Mexico and China, some of which were delayed.
President Donald Trump on Tuesday announced retaliatory measures on Canada after they slapped a 25% tariff on electricity sent to the U.S., saying that he is imposing an additional 25% tariff on steel and aluminum, bringing those tariffs to 50%.
The move escalated a global trade war that intensified a day earlier, when China slapped retaliatory tariffs on the U.S., deepening trade tensions between the world’s two largest economies.
On Monday, the tech-heavy Nasdaq plummeted 4%, recording its worst day of trading since 2022. The Dow Jones Industrial Average and S&P 500 each dropped more than 2% on Monday.
The market drawdown on Monday extended losses last week. The S&P 500 recorded its worst week since September.
When asked about a potential recession in an interview broadcast on Sunday, Trump said tariffs imposed in recent days could bring about a “period of transition.”
“I hate to predict things like that,” Trump told Fox News in an interview recorded on Thursday. “It takes a little time, but I think it should be great for us.”
In response to a question later on Sunday about his reluctance to rule out a recession, Trump said: “I tell you what, of course you hesitate. Who knows?”
The Bureau of Labor Statistics is expected Tuesday morning to release a report on how many jobs are open in the economy, which could provide another clue about the strength of economy amid the new recession concerns. An inflation report is expected Wednesday.
This is a developing story. Please check back for updates.
