Trump's tariffs drive US markets down after plunging Asia & European markets in red

President Donald Trump has driven US markets into the red with his announcement of tariffs — after driving markets in Asia and Europe down.

The US shares failed to hold on to their recent rally and futures of Dow Jones, Nasdaq, and S&P 500 were down more than 1 per cent at the time of writing.

Markets in Asia, including in India that saw 25 per cent tariff, also opened and closed lower on Friday. Similarly, the Stoxx 600 fell around 1 per cent in the first hour of trading and was 1.7 per cent lower on the week — headed to its worst weekly drop since April.

In the United States, the futures of Dow Jones Industrial Average were down 1.10 per cent, futures at Nasdaq 100 were down 1.30 per cent, and futures of S&P 500 were down 1.14 per cent.

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Markets were down as a result of uncertainty sown by Trump’s tariffs and underperformance of some major stocks like Amazon, which fell 7 per cent on the back of light operating income in the current quarter.

Even though the markets are bullish for now, the path ahead looks uncertain, according to Fawad Razaqzada, an analyst at City Index.

“On one hand, Big Tech is delivering in spades, feeding into the [artificial intelligence] gold rush and lifting equity markets to record highs. On the other, geopolitical tensions, valuation concerns and monetary policy uncertainty are threatening to pull the rug from under this rally,” Razaqzada told CNBC.

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Trump unsettles markets across world

Even though the markets were unsettled by Trump’s tariffs, the downturn was not as massive as in April when Trump had first floated his ‘reciprocal tariffs’.

Japan’s Nikkei on Friday closed 0.6 per cent down, Chinese blue chips closed 0.5 per cent down, and Hong Kong’s Hang Seng index was down more than 1 per cent at the time of closing.

In India, the Sensex was down 0.72 per cent and the Nifty 50 was down 0.82 per cent at closing of the trading.

The August 1 announcement on tariffs are somewhat worse than expected, but market reaction was not as volatile as April’s global asset declines because everyone has got much more used to the idea of 15-20 per cent tariffs being manageable and acceptable, thanks to the worse threats earlier, Wei Yao, the research head and chief economist in Asia at Société Générale, told Reuters.