Tariffs and inflation fears drive market rout

Chris Beauchamp IG

Tariff news and signs of renewed inflation in the US continue to worry stock markets says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Stock market turmoil continues

As European markets head towards the close, the volatility continues. US markets opened sharply lower, joining the rest of the world in the red as investors opted to crash out of risk assets in favour of the dollar, yen and gold. Trump’s tariffs, and their severity, have caught investors on the hop, but the strong rhetoric coming from all sides suggests that this will not be a short-lived trade war. ISM data this afternoon showed that prices continue to rise in the US, adding fuel to the fire, and increasing fears that the Fed will have to hike rates this year.

US stocks slump, with tech names not immune

All of this is a far cry from the record highs seen in US indices just a couple of weeks ago. Traders around the globe are scrambling to work out the impact of the tariffs on earnings, but much of the impact will be dependent on retaliatory tariffs by Canada and others, and in turn any US retaliation. Faced with these unknowns, it seems probable that richly-valued US stocks like the Magnificent 7 will continue to suffer losses as investors look to book gains and wait out the storm.

Author

Chris Beauchamp

Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.

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