TradingView: Tariffs Spark Market Sell-Off
The tariffs have sparked a risk-off event, with investors seeking safe havens and the dollar weakening against the euro and pound. Benchmark 10-year Treasury yields fell to 4.168%, and the Dow industrials fell 1.6% or nearly 700 points.
President Donald Trump's confirmation of tariffs on Mexico and Canada has led to a significant sell-off in the stock market, with the Dow Jones Industrial Average dropping 789 points and the S&P 500 falling 2.1%.
The tariffs, set at 25% on imported goods from both countries, are expected to encourage companies to build production facilities in the US. However, analysts at Goldman Sachs warn that the tariffs will raise production costs for some domestic producers and prompt foreign retaliation, potentially hurting domestic production. The VIX, a measure of market volatility, surged to its highest point this year after Trump's announcement.
The market was also impacted by weak economic data, including a decline in manufacturing and construction sectors. The Atlanta Fed's GDP tracker cut its estimated growth rate for Q1 to -2.8%, and the ISM Manufacturing Index showed a modest expansion in factory activity. Defensive stocks, such as Procter & Gamble and Johnson & Johnson, rose as investors sought safe havens.
The sell-off was led by tech companies, with Nvidia falling 7% and the Nasdaq Composite sliding 3%. However, some stocks such as Tesla gained 3% after Morgan Stanley's Adam Jonas named it as his new top pick in the US autos sector. European defense stocks also rallied, with BAE Systems and Thales gaining over 14% after a White House meeting.
The market volatility is expected to continue, with investors closely watching the impact of the tariffs on the economy and trade relations. As the situation develops, traders and investors can use platforms like TradingView to stay up-to-date with the latest market trends and analysis.
