On Wednesday, President Donald Trump presented his import tariffs against the rest of the world. The consequence was that the S&P 500 fell 4.8 and 6 percent, respectively, over the two following trading days.
Thus, the index's market value has decreased by 5.4 billion dollars over two days, reports Bloomberg. And the S&P 500 has fallen back eleven months in market value.
On Friday, only 14 companies on the index rose, and all eleven sectors fell.
The speed of the decline can only be compared to that during the pandemic in the spring of 2020 and the IT company crisis 20 years earlier.
Friday's fall was partly due to China clarifying that the country is imposing an additional 34 percent tariff on goods from the USA, in response to Trump's new tariffs.
The market is bleeding, and more pain is clearly coming, since this escalating trade war risks driving the American economy into a recession, says Luca Paolini, chief strategist at investment advisor Pictet Asset Management.
It's no surprise that China would strike back. But it will inevitably cause a recession, since the damage is done – unless Trump backs down, he continues.
