The stock market reacted sharply, with fears of a full-blown trade war looming.

The S&P 500 shed 1.5%, and the Nasdaq Composite slid nearly 1.8%, as investors dumped stocks tied to international trade and supply chains.

Global Impact of Tariffs

The ripple effects of the new tariffs sent shockwaves through global markets:

• European markets took a hit, with Germany’s DAX index down 1.7%.
• Bitcoin dropped below $95,000, down from $102,000 over the weekend.
• The U.S. Dollar Index surged 0.8% as investors moved to safe-haven assets.
• Oil prices soared, with WTI crude jumping 108% due to supply concerns.

Why the Market Is Reacting

The tariffs include:

• 25% tariff on imports from Mexico and Canada.
• 10% tariff on goods from China.
• 10% tariff on Canadian energy imports.

Mexico has threatened counter-tariffs, Canada has already responded with its own levies, and China is planning to file a WTO lawsuit. The growing tensions have traders fearing increased inflation and economic slowdowns.

Biggest Losers on Wall Street

Several major companies with global supply chains saw their stocks tumble:

• General Motors (-5%)
• Ford (-2%)
• Aptiv (Auto Supplier) (-9%)
• Chipotle (-2%, affected by avocado price increases)
• Constellation Brands (Alcohol Importer) (-5%)

What’s Next?

Investors are now watching closely for:

• Retaliatory measures from China, Mexico, and Canada.
• Potential U.S. tariffs on the European Union.
• Key earnings reports from tech giants like Amazon and Alphabet.
• Friday’s nonfarm payrolls report to assess the labor market’s health.

With uncertainty in global trade, markets are bracing for further volatility. Whether the administration softens its stance or doubles down on its trade war remains to be seen.