📉 5.4% Stock Slide: Is Trump’s Tariff War Reshaping the Market?

Market Shock Since “Liberation Day”

Since President Trump’s April 2 tariff announcement, the S&P 500 has fallen 5.4%.

This sharp drop is fuelling comparisons to past crises like 2008 and 1987. Investors are growing uneasy as the sell-off stretches beyond stocks into other major asset classes.

Treasury Yields Jump Instead of Falling

At the same time, 10-year U.S. Treasury yields surged past 4.5% on Friday, up from 3.99% just a week earlier. Typically, yields drop when markets are fearful—but this time, bond prices are falling too. It’s a rare and troubling break from the usual safe-haven behaviour.

A Dollar in Decline

The ICE U.S. Dollar Index hit a three-year low, falling more than 4% since the start of April. The dollar also weakened against traditional safe-haven currencies like the yen and Swiss franc. This signals that even global investors are beginning to turn away from the greenback.

Confidence Crisis in U.S. Assets

Experts say these moves reflect more than short-term market jitters. George Saravelos of Deutsche Bank pointed to a trend of “rapid de-dollarization,” where countries and investors are reevaluating the dollar’s role as the world’s reserve currency.

Christian Keller of Barclays added that the simultaneous drop in stocks, bonds, and the dollar is more typical of emerging markets—not a global financial powerhouse like the United States.

Foreign Buyers Step Back

The U.S. government depends heavily on international support—over 20% of America’s $36 trillion in debt is held by foreign investors. Though there’s no proof of mass sell-offs yet, even the fear of losing foreign confidence in U.S. Treasurys is enough to rattle Wall Street.

Inflation Concerns on the Horizon

While recent inflation numbers remain calm, many expect the tariffs to push prices up soon. This puts the Federal Reserve in a tough spot, as cutting interest rates to support the economy could clash with rising inflation. Jim Bianco of Bianco Research warned that this “changes the dynamic” in bond markets.

America's Image Problem

This financial shakeup is also damaging the U.S.’s reputation. BlackRock CEO Larry Fink warned that American companies are starting to face backlash overseas due to trade tensions, saying, “We have a big image issue right now.”

A Bigger Shift?

The falling dollar, rising yields, and stock sell-off suggest a larger shift in how investors view the U.S. economy. Whether temporary or a long-term trend, these moves show a growing uncertainty about America’s financial leadership—and the world is watching.

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