"President Donald Trump's additional 100% tariff on China erased $2 trillion from the stock market on Friday and possibly couldn't have come at a worse time. A potentially renewed trade war risks a resurgence of uncertainty in the market, Apollo Global Management chief economist Torsten Slok said Saturday on Fox Business, all while fears of an AI bubble raise doubts about stock valuations and the federal government shutdown looks like it may last throughout October. "This was almost the perfect storm coming together," he warned."
"Slok pointed out that "Liberation Day," when investors were shocked in April by Trump's aggressive tariffs, was just over six months ago, and markets have been getting more used to the idea that "maybe the worst was behind us." The Liberation Day announcement wiped out over $6.6 trillion in value from the U.S. stock market within two days. The S&P 500 experienced its largest two-day loss on record."
"Now, Trump's Friday announcement, which includes plans to increase tariffs on China to 130% and impose U.S. software export controls next month, comes as a "surprise," Slok said on Saturday. Following Trump's announcement, the S&P 500 fell 2.7%, its worst day since April 10, the Dow Jones Industrial Average dropped 878 points, about 1.9%, and the Nasdaq sank 3.6%. Tariffs take time for companies to incorporate them, Slok said, but the effects of another wave of tariffs will be on the horizon. "You should expect the same, namely, higher inflation and also downward pressure on GDP," Slok said."
President Donald Trump's additional 100% tariff on China erased $2 trillion from the stock market and renewed trade-war uncertainty. Apollo Global Management chief economist Torsten Slok warned the move combined with AI bubble fears and a possible prolonged government shutdown created an almost perfect storm. Earlier “Liberation Day” tariffs wiped over $6.6 trillion from U.S. market value within two days and produced the S&P 500's largest two-day loss on record. The new announcement plans to raise tariffs to 130% and add U.S. software export controls. Markets reacted with sharp declines and risks of higher inflation and lower GDP.
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