Market reacts strongly to tariff news
April 4, 2025
Tariffs and more production from OPEC+ sank energy prices yesterday. The news of these two events throws a ton of uncertainty into these market. These markets are likely to react to headlines related to these two items for the next several days. Today, being Friday, we might see a bit of a bounce before the day is through as short sellers take profits but from what level as the selloff continues. The $60 dollar level in WTI crude oil has to be a good level of support and a good target for now. The lower move is clearly not over as today has started out as another huge liquidation day and prices are down substantially.
China has announced that they will have retaliatory tariffs on the US. They announced a 34% tariff on all American imports as well as levying export controls on rare earth minerals. This all raises the concerns of the markets for an all-out trade war that will hurt the global economy.
There are tons of headlines today in which the leaders of many countries around the world make their comments know about President Trump’s actions yesterday. Most are extremely negative and say this will hurt the global economy and put international trade into chaos. Most have also said they will have some type of retaliatory tariffs of their own against the US.
It is going to take time for all this to be sorted out but that is what is going to happen over the next several months. It makes even take years to finally see how all this works out but for now stay nimble and cautious as volatility will be high.