Worldwide stock market today: Dow Jones Futures decrease; How can Trump rates influence the US stock market?

Worldwide stock market today: In the expected lines, the US stock futures fell sharply on Wednesday after President Donald Trump has announced global mutual rates- fears to cause a large trade war.

Dow Jones’s futures fell around 1.5 percent after rate announcements, which reflects the nervousness of the market on the potential economic consequences of Trump’s tariff movements.

In the meantime, large Wall Street Indices finished higher on 2 April for the mutual tariff announcements of US President Donald Trump in the hope that rates would be milder and that there would be countries and product-specific exclusions.

Nasdaq closed 0.87 percent higher, while S&P 500 and Dow Jones climbed 0.51 percent and 0.62 percent respectively.

Trump announced rates for all major trading partners of the US, including China, the European Union, Taiwan, Japan and India. He said that he would impose a basic line rate of 10 percent on all entry to the US from 5 April and higher tasks on some of the largest trading partners in the country.

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Trump said the rates will not be completely reciprocal, but about half of what they are.

“We will charge them about half of what they are and have charged us. So the rates will not be full mutual,” he said.

Trump imposed 26 percent mutual rates on India, 34 percent in China, 20 percent on the EU and 24 percent in Japan.

Moreover, he also attached his plan to 25 percent rates for cars, a movement that could significantly influence countries such as Japan and Korea.

Trump rates: how can it influence American markets?

The market could see an immediate negative response to tariff announcements, as indicated by the Futures of Dow Jones, due to ensuring that rates can yield inflation in the US and weigh economic growth.

Higher inflation can also lead to delayed tariff reductions by the American Federal Reserve, which is another important negative for the markets.

Some experts believe that the rates are higher than expected, which could involve the sentiment of the market.

“Markets expect a good, bad or ugly scenario about rates, and this mutual rate leans more in the ugly scenario, which means that the total amount of rate when you are on average is slightly higher than what was expected,” said Reuters Brian Mulberry, portfolio manager at Zacks Investment Management, said.

However, Trump announced mutual rates at just half the rate that other countries impose on American products, leaving room for negotiation instead of retribution.

Investors would concentrate on whether US trading partners had announced contra-tariffs. This could cause a deeper trade war, which would significantly influence the dynamics of the growth valuation of the world.

“Markets will continue to struggle with the speed with which tarief retails change, as well as the ultimate result of the rates itself,” says Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.

“The silver lining for investors could be that this is just a starting point for negotiations with other countries, and in the end the rates will come across the board – but for now, traders first and ask questions,” said Zaccarelli.

(With Reuters entrances)

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