Stocks Suffer Record Two-Day Wipeout
$6.4 trillion
Based on recent trading, that’s how much value the U.S. stock market shed in the past two sessions, according to Dow Jones Market Data.
The figure represents a new record, though it could move slightly up or down as stocks settle Friday. The biggest two-day pullback before this week was during the Covid-19 market, when $4.4 trillion of stock-market value evaporated in the two days ending March 12, 2020.
A sharp rise in trade-war intensity sent Wall Street spiraling Friday, pushing the Nasdaq into a bear market denoting a 20% decline from its peak.
China’s decision to apply a 34% levy to all imported goods from the U.S. next Thursday, after President Trump’s tariffs go into effect, rattled markets in part because it further deflated hopes that a global settlement could be reached soon.
Another downer for stock-market bulls who until recently had romped in recent years: Fed Chair Jerome Powell said the U.S. economy was likely to face a period of higher prices and weaker growth than seemed possible a few weeks ago because of larger-than-anticipated tariff hikes.
The Nasdaq slid 5.8% and the Dow Jones Industrial Average fell 2232 points. The carnage was widespread, with fewer than two dozen S&P 500 stocks rising for the day and more than two dozen dropping 10% or more. The marketwide toll from the two-day tariff rout surged to a record $6.4 trillion.
The torrent of selling late this week shows investors coming to grips with the grim implications of the standoff. The levies announced late Wednesday were deeper and more aggressive than the business world expected. Retaliation stands to intensify the economic effects of the policies, which stand to reduce consumer income and slow economic growth.
Now investors are bracing for further conflict—none of which is likely to improve the outlook for the global economy or corporate profits, the strongest driver of stock prices.
Even as Trump left the door open to making deals, he vowed new tariffs on drugs and microchips. Investors took little comfort from Trump’s stated willingness to negotiate.
JPMorgan analysts on Thursday boosted their odds on a global recession to 60%.
Trump remained unbowed, saying now is a “great time to get rich” and that “China played it wrong, they panicked.”
Marco Rubio, the secretary of state, acknowledged that “markets are crashing” but said economies weren’t, and that global businesses would adjust to the new environment.
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
