Christopher Wood, a global head of equity strategy in Jeffers, in his note ‘Gride and Fear’ wrote to investors, warned that the ‘waterfall decline’ in the US stock market is increasing. He said that the risk is not only about high prices, but is selling in the panic of passive investment. Wood wrote, “The increase in tariff is clearly bad news and this is also evident from the historical example of the Smut-Hole Tariff Act of 1930”.
Dow Jones fell 1,700 points in just one session earlier this week and fell down 10 per cent below its high level. The S&P 500 index declined by 5 percent while Nasdaq weakened by 6 percent and declined by more than 1,000 points. The reason for this is the retaliation of President Donald Trump, who has increased the possibility of the country’s recession. The decline in US economic activities is detected by the decrease in two consecutive quarters in the country’s GDP (GDP).
According to Fitch Ratings analysts, American tariffs have reached a level that are changing global economic approaches, enhancing the risk of recession in the US and impacting the ability of American Federal Reserve to reduce interest rates. He believes that the US growth in 2025 may be slower than the 1.7 per cent estimate of March 2025 due to more tariffs than estimated.
Fitch said, ‘Consumer prices will rise due to increase in fees and the pace of corporate profits in the US will slow down. High prices will affect real remuneration, which will show the effect on consumer spending. Low profits and policy uncertainty will affect business investment.
Will the Indian markets survive?
Analysts believe that the Indian stock market has survived a large extent in the global market as the impact of the charges has been seen to a extent. He has warned that the impact on the areas affected by Trump’s counter -duty will continue as investors will avoid taking risks and will stay away from the affected areas. He believes that the Indian large economic situation is strong and the country can be successful in facing shocking negative steps. He said that although the stock markets would not be completely separated from global developments.
But the consequences of companies and estimates of companies, its impact on summer season and its impact on economic activities, monsoon moves and its impact on inflation, central bank policies and dialogue with the US regarding tariffs will need to be monitored.
G. Chokalingam, founder and head of research, Equinomics Research, said, “If there is a slowdown in the US, the dollar will be weak, oil prices will also fall.” This is a good sign for India.
First Published – April 4, 2025 | 11:09 pm IST
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