Equity and FX markets buffeted by Trump tariff threats
The sell-off in US equity markets, with the S&P 500 down 4.6% and Nasdaq by 7.5% over the past week, has reflected a range of factors; i) fresh tariff threats from US President Donald Trump, ii) macroeconomic data suggesting the uncertainty is starting to weigh on US business and consumer confidence iii) pressure on tech-firms following earnings from Nvidia Thursday (February 27th) poorly received by the market. The next two weeks should provide an acid-test of whether Donald Trump is merely sabre rattling, or truly intends to impose 25% tariffs on Canada and Mexico on March 4th, having already put-off doing so on two occasions. Should any clarity on trade policy be established the next stand-off will be in the US Senate where Trump’s package of tax cuts will add to a Federal deficit already worth 6% of GDP, with the Federal debt/GDP ratio already set to push through 100% in 2025.
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