The U.S. stock market experienced turbulent trading on Wednesday as tensions from President Donald Trump's escalating trade war continued to influence market sentiments. This volatility came after significant declines in other global markets, notably affected by Trump's recent tariffs on various imports.
On April 9, 2025, European Union member states voted to impose retaliatory tariffs on $23 billion worth of American goods, responding to Trump’s 25% tariffs on imported steel and aluminum. These tariffs will be implemented in phases, with some set to begin on April 15, while others will follow on May 15 and December 1. As of the reported date, there was no specific list of the impacted goods provided by the EU Commission.
In the East, China announced a substantial increase in tariffs on American goods to 84%, effective from April 10. Canada also took action, imposing a 25% levy on auto imports from the U.S. that fail to comply with the 2020 US-Mexico-Canada Agreement. These developments highlight a growing trade confrontation that has raised concerns across various sectors.
Turning to specific companies, Peabody Energy saw its stock rise by 3.8% following Trump's signing of executive orders aimed at supporting the coal industry. This policy allows certain older coal-fired power plants to maintain operations, while also lifting barriers to coal mining and prioritizing coal leasing on federal lands. Despite this recent uptick, Peabody's shares are still nearly 50% down for the year.
Delta Air Lines, the most profitable airline in the U.S., expressed significant concerns due to the disruptions in global trade caused by tariffs. The company revised its performance expectations for 2025, reflecting a broader sentiment among businesses facing tariff-related uncertainties. Walmart similarly abandoned its first-quarter operating profit guidance, acknowledging potential risks stemming from the ongoing tariff situation.
The European Chamber of Commerce in China voiced the need for businesses to adapt their models and supply chains due to tariffs, anticipating a rise in operational costs and consumer prices. This strategic shift could impact companies that rely on components imported from the U.S., leading some to reconsider their production locations.
In the commodities market, gold futures gained more than 3% to $3,085 per ounce amidst rising demand for secure investments in uncertain times. Copper prices also increased for the first time in five days, and silver rose by nearly 2%. Meanwhile, U.S. stocks showed some resilience with the S&P 500 remaining nearly unchanged in early trading, though the Dow Jones Industrial Average indicated a decline of 0.5%.
Pharmaceutical companies like Eli Lilly and Pfizer faced declines in their stock prices following Trump's announcement of impending tariffs aimed at encouraging U.S. production of medications. Investors were quick to react, as the potential for tariffs led to immediate sell-offs in pharma shares.
The bond market also faced unusual volatility, with the yield on the 10-year Treasury rising significantly, indicating possible stress within financial markets. Analysts speculate that hedge funds may be selling Treasury bonds to cover losses in other areas, while foreign investors might also be divesting due to trade concerns.
Furthermore, China officially criticized the U.S. tariffs during a World Trade Organization meeting, calling them a violation of international trade principles. Chinese officials emphasized that the trade imbalance should not be viewed as it currently stands, asserting that economic relations remain fundamentally reciprocal.
As global financial markets grapple with the implications of sweeping tariffs and retaliatory measures, businesses continue to reassess strategies to mitigate the impact. This ongoing trade war not only influences stock performances but has broader ramifications on international relationships and economic stability.
