Market Sell-Off as Investors React to Trump Tariffs

Key Market Indexes Drop Sharply

* Nasdaq Composite (^IXIC): -2.09%
* S&P 500 (^GSPC): -1.75%
* Dow Jones Industrial Average (^DJI): -1.42%

Trump's Tariffs Surprise Markets

* President Trump's decision to impose tariffs on Canada, Mexico, and China has caught markets off guard.
* Economists and market analysts had not fully priced in the risk of tariffs.
* Even betting markets, considered reliable indicators, underestimated the likelihood of tariffs.

Uncertainty and Market Impact

* The tariff announcements have raised concerns about increased policy uncertainty.
* Investors are re-evaluating potential risks and pricing in the potential impact of the tariffs.
* US dollar surged to a two-year high, while retail and auto stocks suffered sell-offs.

Analysts' Outlook

* Morgan Stanley analysts believe US equities may face pressure, with services outperforming consumer goods.
* JPMorgan warns of the difficulty in reducing policy uncertainty once tariffs are imposed.
* Goldman Sachs analysts see downside risk to S&P 500 earnings forecasts and a potential 5% near-term decline if tariffs are sustained.

Investor Sentiment

* Investors' belief in the long-term implementation of tariffs will determine the extent of the equity market impact.
* A short-lived tariff period is expected to have a меньшее impact.
* Prolonged tariffs could lead to further market declines.