Donald Trump’s strategy of expanding U.S. exports and reducing cheap imports continues to hurt U.S. stock market indexes. The U.S. stock market is unstable and indexes are down Monday morning after posting hefty losses last week.
The Dow Jones Industrial Average plunged 2% last week amid losses from big industrial and manufacturing companies. The 2% decline in the Dow index was the most significant weekly decline since March 23. General Electric Company (NYSE:GE) was booted out from the Dow index last week while the majority of machinery makers and diversified industrial companies are showing their concerns on trade war tensions.
The S&P 500 index also plummeted 0.9% last week while the Nasdaq dropped slightly by 0.3% after reporting gains in the previous four weeks straight.
U.S. Stock Market is Unstable
Aside from previous losses, the market is likely to remain in doldrums despite positive signs from the energy sector.
After China, Donald Trump has also initiated a trade war with its other trading partners, which traders believe wouldn’t be a good sign for U.S. companies that have extensive penetration in global markets.
President Donald Trump threatened European Union on Sunday to remove tariffs or face the consequences. He tweeted, “The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one-way street.”
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Donald Trump is looking to place 20% tariff on European cars and other products if European Union stands by their decision of putting 25% tariff on $3 billion worth of U.S. goods.
EU Commission Vice-President Jyrki Katainen said, “If the U.S. decides to raise their import tariffs, we’ll have no choice, again, but to react,” according to Reuters. “We don’t want to fight (over trade) in public via Twitter. We should end the escalation.”
Investors are worried that escalating trade war between the U.S. and other countries could drag the global economy into chaos.
Featured Image: Depositphotos/© Petrovich99
