By Financial markets plunged into turmoil overnight as leaked Treasury documents confirmed Trump’s radical tariff proposal—a 32% across-the-board levy that triggered the largest repricing of global risk assets since the 2020 pandemic crash. The selloff was immediate and brutal:
- Equities: S&P 500 futures cratered 3.2%, while the Nikkei 225 tumbled 4.1%, its worst drop since 2022.
- Bonds: 10-year Treasury yields spiked 18 basis points to 5.05% as inflation fears surged.
- Currencies: The yuan slumped 1.8%—its steepest decline in a year—while the dollar index (DXY) jumped 0.9% on safe-haven demand.
- Commodities: Copper, a key trade bellwether, plunged 5.3%, and Brent crude slid 4% on demand concerns.
Sectors most exposed to China trade bore the brunt:
- Semiconductors (SOXX): Collapsed 6.7% on fears of disrupted supply chains.
- Auto stocks (CARZ): Plunged 5.9% as Tesla warned of $7K Model Y price hikes.
- Retail (XRT): Dropped 4.5% after Walmart flagged ‘double-digit’ consumer price increases.
The moves reflect market panic over what analysts call ‘the most aggressive protectionist shift since Smoot-Hawley’—with Goldman Sachs warning of a potential 10% earnings hit for S&P 500 multinationals if the tariffs take effect.”
Defensive moves underway:
→ Apple accelerating Vietnam production shift
→ Hedge funds loading up on gold and crypto
→ CME adding tariff-impact futures contracts