In recent weeks, we have witnessed a significant decline in global stock markets. The main reason for this volatility is the new tariffs introduced by President Donald Trump against major US trading partners such as Canada, Mexico and China. These measures have raised fears of a possible recession and caused considerable uncertainty among investors.
During the week, financial markets experienced significant fluctuations across a variety of assets. Equity markets, particularly in the US, suffered significant losses. The S&P 500 index fell by almost 4% to 5 572.07 points, the Dow Jones weakened by 2.5% and the Nasdaq Composite technology index recorded a 4% fall to 17 436.10 points, representing its worst day since September 2022.
In contrast, the gold market showed a positive trend as investors seek a safe haven in times of market volatility. The gold price rose 0.4% to $2,901.13 per ounce.
The cryptocurrency market posted mixed results. Bitcoin fell to a four-month low of USD 76,867 after a previous decline, then recovered somewhat to a level just above USD 80,000. Since the beginning of 2025, Bitcoin has seen a 14% decline and remains 26% below its all-time high.
Trump’s tariffs and their impact on markets
In early February 2025, President Trump announced the imposition of 25 percent tariffs on imports from Canada and Mexico and 10 percent tariffs on imports from China. These tariffs are justified by the desire to protect the US market from unfair trade practices and to ensure national security. However, the reaction of the financial markets was immediate and negative. The Dow Jones index fell by more than 300 points, reflecting investors’ fears of a possible slowdown in economic growth.
As a result of the market events, the US Federal Reserve (Fed) lowered its GDP growth forecast for the first quarter of 2025 from the original 3.9% to -2.8%. This dramatic drop indicates the possible start of a recession in the US. In addition, increased tariffs may lead to rising inflation, which could negatively affect consumer spending and corporate profits.
The negative consequences of Trump’s tariffs are not limited to the US. Global stock markets have seen significant losses. Japan’s Nikkei index, Taiwanese equities and Hong Kong’s Hang Seng index all saw significant declines. European markets also reacted negatively, many of which started trading lower.
