Stocks Get Hit as Dollar Climbs on Tariff Jitters
Stocks got hammered, the dollar climbed and short-dated Treasury yields outperformed on concern that sweeping US tariffs could hamper global economic growth and fuel inflation.
Equities dropped across the board, with the S&P 500 down 1.5%. Carmakers with big exposure to Mexico, Canada and China tumbled. Semiconductor companies, which are likely to find themselves in the geopolitical cross-hairs also got hit. With the new tariffs threatening to disrupt North America’s tightly integrated oil market, energy shares also moved lower.
While the dollar pared a rally that earlier put it on pace for its biggest advance since the onset of the pandemic, the greenback was still up against almost every major currency. The Mexican peso lost 1.3% while Canada’s loonie dropped 0.9%.
Treasury two-year yields rose as much as eight basis points to 4.28% as longer-dated rates fell, flattening the curve. Such moves are typically associated with stagflation — when inflation and elevated interest rates harm bonds in the short term, only for subsequently weaker growth to make longer-term debt more appealing.
The S&P 500 fell 1.5% as of 9:31 a.m. New York time
The Nasdaq 100 fell 1.8%
The Dow Jones Industrial Average fell 1.1%
Source : Bloomberg
