Dollar Surges, Stocks Dive as US Tariffs Trigger Global Trade War
The Bloomberg Dollar Index surged 1.3%, reaching a two-year high, as President Trump imposed tariffs on Canada, Mexico, and China, threatening global economic growth.
The Canadian dollar plummeted to its lowest since 2003, while the euro weakened. The Japanese yen, seen as a safe haven, gained.
S&P 500 futures dropped 1.6%, anticipating a hit to corporate earnings. European carmakers and cryptocurrencies also suffered steep losses.
Goldman Sachs predicts a potential 5% decline in US stocks, while RBC Capital Markets estimates a range of 5% to 10%.
Analysts fear the tariffs will lead to higher prices, inflation, and slower economic growth.
Emerging markets also experienced significant losses, with the Mexican peso falling over 1% and the South African rand slumping after Trump announced funding cuts over land seizure concerns.
In the energy sector, tariffs on imports from Canada and Mexico could disrupt North America's oil market and raise gasoline prices.
Several economic events are expected this week, including speeches by Fed officials and earnings reports from major companies.