(FOX 2) – The stock market is experiencing a significant downturn. The US financial markets reacted negatively following President Donald Trump’s announcement of new tariffs on Thursday, creating anxiety and uncertainty from Wall Street to Main Street.
Overview:
On Friday, FOX 2 spoke with financial experts as the markets faced their most severe challenges since the COVID crash, triggered by China’s response of matching Trump’s substantial tariff increases in an ongoing trade dispute.
Trump has set a minimum tariff of 10% on all global imports, with significantly higher taxes on items from China, the European Union, and even smaller nations like Vietnam, which faces tariffs as high as 49%.
Expert Opinions:
Meanwhile, Thomas Shohfi, an associate professor of finance at Wayne State University, expressed concern that many individuals will feel the effects of these recent developments.
“It’s going to lead to significant inflation, and consumers will see a considerable impact on their budgets,” he noted. “The market is filled with anxiety. Investors are uncertain about the extent of a potential recession, the damage this could inflict on the economy, and how it might affect the value of the dollar. With so many variables at play, it’s challenging to predict when this downturn will stabilize.”
For those tempted to panic, Shohfi advises remaining calm and continuing with established strategies, including:
- Regularly investing
- Maintaining a clear investment strategy
- Setting defined financial goals
“If you need to make adjustments to your portfolio, that’s something I took care of this week,” he added. “It’s crucial not to make hasty decisions in such volatile market conditions.”
Federal Reserve Chairman Jerome Powell also shared his insights, stating that the economy remains fundamentally strong.
“While uncertainties are heightened and risks are increasing, the economy is still on solid ground. Recent data indicates robust growth, a balanced labor market, and inflation rates that are close to our 2% target, although still above it,” he commented.
Context:
On Friday, the S&P 500 tumbled by 6%, the Dow Jones Industrial Average fell by 5.5%, and the Nasdaq Composite dropped by 5.8%.
According to the Associated Press, markets are currently confronting their most significant turmoil since the COVID-19 pandemic in 2020 due to China’s retaliation in the escalating trade war following Trump’s tariffs.
In the meantime, financial experts are urging people to exhibit patience.
“Until there is a resolution regarding tariffs, whether by eliminating them or by providing some form of relief, I don’t think the markets will return to previous levels,” Shohfi concluded.
Source: FOX 2 gathered information from prior reports and conducted interviews with Federal Reserve Chairman Jerome Powell and Associate Professor Thomas Shohfi.
