Wall Street swung between sharp and more modest losses on Monday as stock markets worldwide sank on concerns President Donald Trump’s tariffs may ignite a punishing trade war.
Stan Choe, The Associated PressPedestrians walk along Wall Street near the New York Stock Exchange in New York, U.S., on Friday, April 7, 2017. Photographer: Michael Nagle/BloombergNEW YORK —
But U.S. stocks pared their losses after Mexican President President Claudia Sheinbaum said tariffs on her country’s goods are on hold for a month following a conversation with Trump. That pushed traders to quickly pare expectations for how many cuts to interest rates the Federal Reserve may deliver this year, if any. Lower interest rates can encourage U.S. employers to hire more workers, while also goosing prices for investment, but the downside is they can give inflation more fuel.
Trump himself warned Americans they may feel “some pain” from the tariffs, which he said would be “worth the price” to make America great again. He also said Sunday night that import taxes will “definitely happen” with the European Union and possibly with the United Kingdom as well. Instead of stocks and crypto, investors moved instead into longer-term U.S. government bonds, which are seen as some of the safest possible investments. The resulting rally in their prices drove Treasury yields down.It’s a reprieve, at least temporarily, from a rise in longer-term Treasury yields that had shaken Wall Street in recent months. Yields had climbed in part on worries about just such tariffs from Trump, and the possible result of higher interest rates they could entail.
That puts the spotlight on companies like Nvidia and other winners of the artificial-intelligence boom. Nvidia fell 2.6% and was one of the heaviest weights on the S&P 500.
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