US stock futures sink, euro pares gains as Trump unveils tariff plan
'Markets were anticipating a good, bad or an ugly scenario on tariffs and this reciprocal tariff is leaning more into the ugly scenario.'
US stock futures sank and the euro paired gains late on Wednesday after US President Donald Trump unveiled global reciprocal tariffs during an event at the White House.
Trump said he would impose a 10% baseline tariff on all imports to the United States and higher duties on some of the country's biggest trading partners, in a move that ratchets up a trade war that he kicked off on his return to the White House.
The sweeping duties would erect new barriers around the world's largest consumer economy, reversing decades of trade liberalization that have shaped the global order.
Trading partners are expected to respond with countermeasures of their own that could lead to dramatically higher prices for everything from bicycles to wine.
For investors, who had kicked off the year with high hopes for pro-growth policies from Trump but have been spooked by a barrage of tariff-related headlines, Wednesday's announcement was the clearest look at coming changes to the trade and tariff landscape.
"Markets were anticipating a good, bad or an ugly scenario on tariffs and this reciprocal tariff is leaning more into the ugly scenario, meaning that the total amount of tariff when you average out is slightly higher than what was anticipated," said Brian Mulberry, portfolio manager at Zacks Investment Management.
Stock futures fell, with US S&P 500 E-minis ESc1 down 1.5%, while the euro pared gains to trade up 0.3% at $1.083. Against the yen, the dollar was 0.2% lower at 149.38 yen. Safe-haven gold held near record highs.
Reuters
