US stock futures declined as investors brace for the imminent announcement of new US tariffs, sending ripples through the market.
Futures for the S&P 500 dropped by 0.2% following a turbulent trading session on Monday. In contrast, Europe’s Stoxx 600 Index rose by 0.6%, with pharmaceutical stocks leading the gains. Analysts at JPMorgan Chase & Co. noted that the impact of US tariffs on the pharmaceutical sector is expected to be “manageable.”
Gold Hits Record High as Investors Seek Safe Havens
As market uncertainty grows, investors flocked to safer assets, causing gold prices to surge to a new record high. Meanwhile, the yield on 10-year Treasury bonds fell by approximately three basis points.
The uncertainty surrounding President Trump’s upcoming tariff announcement is keeping investors on edge. Trump is expected to unveil his reciprocal tariff plan on Wednesday at 3 pm during an event in the White House Rose Garden, though details of the tariffs remain unclear. This ambiguity is making investors hesitant to take on risky stock bets, prompting Wall Street strategists to revise their forecasts.
Analysts Lower Forecasts Due to Market Volatility
In response to the uncertainty, Goldman Sachs has revised its forecast for Europe’s Stoxx 600 index. The firm lowered its 12-month target for the index from 580 points to 570 points, citing weaker growth projections. Similarly, analysts in the US have made similar adjustments.
“The range of outcomes is so wide that traders are struggling with how to price in that potential outcome,” said Laura Cooper, global investment strategist at Nuveen.
Trump’s Tariff Plan: Aimed at Protectionism
President Trump has characterized his April 2 announcement as a “Liberation Day,” signaling the beginning of a more protectionist policy. This new stance is aimed at retaliating against trading partners he claims have been taking advantage of the US.
Already, Trump has imposed tariffs on the US’s largest trading partners—Canada, Mexico, and China—affecting products such as automobiles, steel, and aluminum. The US may soon impose tariffs on copper, with further threats targeting imports like pharmaceuticals, semiconductors, and lumber.
Asian Markets React to Xiaomi Incident
In Asia, shares of Xiaomi Corp. fell by about 5% in Hong Kong after the company confirmed that one of its SU7 electric cars was involved in a fatal accident. Local reports indicate that three people died in the incident.
Meanwhile, iron ore and base metals saw price increases after data revealed that China’s manufacturing activity reached its highest level in four months.
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