Tariff Upheaval Causes Stock Market Drop; Nasdaq Down 0.6%
Stocks are down slightly on Monday after the Supreme Court get rid of many of President Donald Trump's tariffs.
Quick overview
- The Supreme Court's decision to deny most of Trump's tariffs led to a decline in stock markets, with the Nasdaq dropping 0.6%.
- Financial assets experienced volatility, with Bitcoin falling to $65K and U.S. Treasury yields decreasing to 4.07%.
- Safe haven assets like gold and silver saw gains, with gold increasing by 2% and silver by 5%.
- Tech stocks are expected to be particularly affected by ongoing tariff and trade uncertainties, with notable declines in companies like Palantir and Microsoft.
As President Donald Trump’s tariffs were released by the Supreme Court, the stock market fell back in uncertainty over what would happen next, with the Nasdaq dropping 0.6%.
Stock indices moved lower as the week began with the Dow falling 0.5% and the S&P dropping 0.4% against the Nasdaq’s 0.6% decrease. The drop is attributed to the U.S. Supreme Court’s decision to deny the majority of Trump’s tariffs in a sweeping motion that erased much of his trade orders since taking office.
The tariffs that were primarily targeted were those considered reciprocal duties, or tariffs imposed in order to strike back at trade partners that Trump accused of taking advantage of the United States in exports and imports. The ruling took place Friday, and the market reacted in minor turmoil on Monday as trading began.
Stocks and Assets Fall
On Monday, a number of financial assets felt the blow from disrupted trade and the uncertain future of the import and export business. Trump issued new tariffs that were not connected to the controversial Emergency Economic Powers Act, and as a result, the price of Bitcoin fell to $65K. U.S. 10-year Treasury yields also dropped 0.02% to hit 4.07%.
At the same time, gold and silver futures both climbed. These are considered safe haven assets that perform well when stocks and cryptocurrencies drop, and gold increased by 2% while silver made a 5% leap upward. The U.S. dollar index, on the other hand, fell to 97.74.
Liquidity is occurring all across the market, and tech stocks are likely to be hit the hardest with these changes, since they have the most to gain or lose by tariff decisions. Some of the technology stocks that performed well last week are dropping now, with Palantir (PLTR) down 4% and Microsoft (MSFT) dropping 2%.
As tariff and trade uncertainty continue, investors should expect further decline among tech stocks in particular. The volatility is likely to be short lived, but it could erase many of the gains made during the recent earnings season. The market is waiting for clear institutional indicators now and some sign that things are returning to normal. At the moment, the international trade market is in a state of flux that could cause investors to hesitate and analysts to issue wild predictions that will keep stocks slipping sharply.
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