1. Trump's 10% tariff on imports starts, potentially escalating trade tensions. 2. Tariffs caused a $5 trillion drop in S&P 500 value, marking a historic decline. 3. Higher tariffs on various countries set to begin next week amplify uncertainties. 4. JPMorgan raises recession likelihood to 60% post-tariff announcement. 5. Over 1,000 product categories exempted from tariffs, valued at $645 billion.
Historically, tariffs lead to trade disputes and increased costs, negatively affecting market confidence. The immediate loss of $5 trillion in market value reflects significant investor concern over future earnings potential.
Tariffs have direct implications on earnings across numerous sectors, particularly for companies reliant on imports. Given the S&P 500's diverse composition, almost all sectors could face pressures that affect stock prices.
The rapid implementation of tariffs will likely cause immediate volatility; historical tariff events often lead to swift market reactions. For example, the market's response to the China-U.S. trade war demonstrated rapid declines upon tariff announcements.