Tariff increases as a catalyst: How President Trump’s decisions are shaking up the markets and putting investors on alert
New Tariffs Cause Market Turmoil
On Wednesday, US President Donald Trump shocked global markets by announcing extensive new tariffs on 185 countries. This action led to an immediate decline in US stock futures and major cryptocurrencies, triggering widespread risk aversion.
The Kobeissi Letter described the market action as “truly crazy to watch,” as markets slumped brutally during Trump’s “Make America Wealthy Again” event. Within just 15 minutes, the S&P 500 lost over $2 trillion in market capitalization, with Nasdaq 100 futures experiencing a nearly 900-point swing before gradually recovering from the low.
Market Data and Industry Perspective
At the same time as the tariffs were announced, the Bitcoin price temporarily spiked before falling again. Bitcoin fell to around $83,200, a 2.3% drop. Ethereum experienced an even steeper decline of 4.5%, trading at $1,817.
“At this point, there’s very little reason to take risks,” noted Joe McCann, CEO of Asymmetric, in an interview with Decrypt. “Crypto markets are currently moving in lockstep with traditional markets, and without a clear catalyst, crypto is trading like a risky asset.” This correlation between crypto and stock markets has increased significantly in recent financial quarters.
Market Analysis and Expert Opinions
McCann also addressed rising inflation expectations after one-year inflation swaps rose above 3.3%. He warned that the tariff shock could push second-quarter GDP into negative territory. Countries like Canada are already experiencing resistance to Trump‘s tariff powers, for example in the Senate, where a resolution to revoke Trump’s emergency powers over Canada has gained momentum.
Forecasts and Future Implications
The sudden and unpredictable announcement of the tariffs is refocusing investors’ attention on macroeconomic challenges. Markets now appear to be reassessing inflation trends, growth risks, and the necessary policy responses to developments in the second quarter. A further decline in the markets could represent a turning point for crypto, as economic conditions and politics will significantly influence price movements.
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