logo
Oil and stock markets plunge after Trump's tariffs rattle investors

Oil and stock markets plunge after Trump's tariffs rattle investors

The National03-04-2025

Oil and global stocks dropped on Thursday, as markets were rattled by US President Donald Trump's sweeping tariffs announced on Wednesday, expected to upend global trade. Brent, the benchmark for two thirds of the world's oil, was down 2.24 per cent at $73.27 a barrel at 7.15am UAE time on Thursday. West Texas Intermediate, the gauge that tracks US crude, was 2.43 per cent lower at $69.97 a barrel. Asian stocks also fell sharply on Monday, with Japan's Nikkei 225 index plunging by about 4.6 per cent in early trading to hit its lowest in about eight months, before recovering slightly later in the day. Mr Trump announced a higher-than-anticipated 24 per cent tariff on Japanese goods. Meanwhile, South Korea's benchmark Kospi index was also down about 1.08 per cent, Hong Kong's Hang Seng index was 1.64 per cent lower, the Shanghai Composite index was 0.36 per cent lower at 7.25am UAE time. US stock futures were also down on Thursday, with the S&P 500 and the Nasdaq futures down 2.77 per cent and 3.3 per cent, respectively. 'Companies that make up the S&P 500 generate about 40 per cent of their revenue outside of the United States. This leaves Wall Street exposed to potential trade wars that hamper the free flow of goods and services,' said Zain Vawda, market analyst at Oanda. 'S&P 500 technology companies such as Apple, Microsoft and Nvidia rely on non-US markets for over half their sales. Given the poor performance by some of them so far in 2025, caution appears to be the only game in town.' Mr Trump announced sweeping tariffs on US trading partners on Wednesday, as world leaders prepared to impose retaliatory actions, setting the stage for possible trade wars that could affect global economic growth. The minimum 10 per cent tariffs on all imports were established through an executive order with Mr Trump saying the action will be imposed on 'friend and foe alike' because, 'in many cases, the friend is worse than the foe in terms of trade'. China and Vietnam were the targets of some of the harshest tariffs, at 34 per cent and 46 per cent. India will be hit with a 26 per cent tariff while the EU will receive a 20 per cent levy. Pakistan (29 per cent), Israel (17 per cent) and the UK (10 per cent) were also on a list of more than a dozen countries hit by the tariffs. Mr Trump also announced a minimum baseline tariff of 10 per cent for remaining countries, with rates going even higher for countries deemed the 'worst offenders'.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Oil prices jump 4% on rising Middle East tension
Oil prices jump 4% on rising Middle East tension

The National

time44 minutes ago

  • The National

Oil prices jump 4% on rising Middle East tension

Oil prices rose more than 4 per cent on Wednesday as the US was preparing to evacuate non-essential staff from its embassy in Baghdad amid rising regional tension. Brent crude futures rose $1.96, or 3.02 per cent, to $66.82 per barrel. West Texas Intermediate crude gained $2.93, or 4.51 per cent, to $67.90 per barrel at 4pm ET. 'It's so fragile. If you see any aberration like that, it doesn't surprise me at all you see volatility in oil prices,' said Peter Andersen, founder of Andersen Capital Management in Boston. The US State Department said it was preparing to evacuate non-essential staff in its embassy in Iraq, Opec's second-largest producer of crude oil behind Saudi Arabia. Non-essential staff members and family members were also authorised to leave Bahrain and Kuwait, according to reports. Tension in the region flared up on Wednesday as efforts between the US and Iran to reach a nuclear deal appeared to stall. In an interview with the New York Post published on Wednesday, President Donald Trump said he was getting 'less confident' about the prospects of a deal being reached. Mr Trump had previously expressed hope that the two sides could reach a deal, and a sixth round of talks were scheduled to take place in Oman on Thursday. 'Something happened to them, but I am much less confident of a deal being made,' he told the Post. Mr Trump added Tehran will not have a 'new nuclear weapon' regardless if a deal is reached. Matthew Bey, a senior global analyst at the Rane Network in Austin, said Mr Trump's comments are 'only reinforcing fears that nuclear talks may soon fall apart'. 'The likelihood of a US-Iran nuclear deal, even a temporary one, has declined in recent days as the White House has hardened its demand on Iran having to give up the right to enrich uranium and Iran has demonstrated little willingness to do so,' Mr Bey told The National in an email. Iran's Minister of Defence Aziz Nasirzadeh had also said on Wednesday that Tehran will strike US bases in the Middle East if nuclear talks fail and conflict arises. Major indexes on Wall Street wavered aftedr developments in the region, as investors continued to assess the prospects of a US-China trade truce and tame inflation data. The Dow Jones Industrial Average was virtually flat, losing 1.1 points at the closing bell. The S&P 500 and Nasdaq Composite both closed 0.27 and 0.50 per cent lower, respectively. 'Given such uncertainty in the markets right now we tend to defer being negative when we can't understand this stuff. There's a handshake deal, but it's a long way off from an actual deal,' Mr Andersen said.

Tariffs seen lifting underlying US consumer prices in May
Tariffs seen lifting underlying US consumer prices in May

Gulf Today

time3 hours ago

  • Gulf Today

Tariffs seen lifting underlying US consumer prices in May

US consumer prices likely increased moderately in May amid relatively cheaper gasoline, but the Trump administration's import tariffs probably started filtering through to other goods, potentially raising underlying inflation pressures. The Consumer Price Index (CPI) report from the labour Department on Wednesday could show the CPI less the volatile food and energy components rising by the most in four months. Economists said the increase in the so-called core CPI would be attributable to higher prices from President Donald Trump's sweeping import duties. May would mark the start of tariff-related high inflation readings that could last through year end, they said. Walmart last month said it would begin raising prices in late May and June. Economists said inflation has been slow to respond to tariffs as most retailers were selling merchandise accumulated before the duties took effect. 'Retailers showed remarkable restraint in April,' said Stephen Stanley, chief US economist at Santander US Capital Markets. 'May should bring the leading edge of price increases, with the maximum impact coming in June and July.' The CPI likely increased 0.2 per cent last month after advancing by the same margin in April, a Reuters survey of economists showed. Gasoline prices were mostly lower in May as concerns over global economic growth curbed crude oil prices. In the 12-months through May, the CPI was forecast increasing 2.5 per cent after rising 2.3 per cent in April. Some of the rise in the year-on-year CPI would reflect last year's low readings dropping out of the calculation. Core CPI is forecast to have climbed 0.3 per cent, which would be the biggest gain since January, after rising 0.2 per cent in April. In the 12 months through May, core CPI inflation is estimated to have increased 2.9 per cent after rising 2.8 per cent in April. The Federal Reserve tracks different inflation measures for its 2 per cent target. The US central bank is expected to leave its benchmark overnight interest rate in the 4.25 per cent-4.50 per cent range next Wednesday while policymakers monitor the economic impact of the tariffs. The CPI data will come under close scrutiny in the months ahead after the Bureau of labour Statistics, the labour Department's agency that compiles the report and other economic releases including the closely watched employment report, announced last week the suspension of CPI data collection in three cities because of resource constraints. The BLS like all government agencies has been severely affected by mass firings, voluntary resignations, early retirements and hiring freezes, which are part of an unprecedented campaign by the White House to drastically reduce the size of government and remake it. The BLS has also announced that it would, effective with the release of the July Producer Price Index data in August, end the calculation and publication of about 350 indexes. That would include data from PPI industry, commodity, final demand-intermediate demand and special index classifications. Economists said that the BLS had with the CPI data reported a rise in the share of categories for which prices were calculated using a method called different cell imputation, which some viewed as less accurate. The BLS said on Tuesday its published data met rigorous standards, but did not address staffing issues. 'Data quality is evaluated through measures of variance, bias studies, and assessments of survey methods,' the agency said in a statement to Reuters. 'BLS continues to evaluate data quality.' A former BLS commissioner told Reuters that staff levels were considerably low at the agency. 'I understand that BLS staffing is down by at least 15% now, that's not reflected in any official numbers yet, because many of them are still being paid,' said Erica Groshen. 'They are not at work and it is impinging on the agencies. Also the hiring freeze means that they can't be replaced.' Groshen said the CPI report remained reliable, noting an increased shift towards electronic collection of data. 'At a national level, the standard errors aren't really affected very much, and the reliability is still good, but it's really disaggregated at the granular level, where you're starting to see some real losses,' she said. 'It's just not aiding publication standards, and so they're not putting it out, but they can still use it as input to the national numbers.' Other economists agreed, noting that the collection suspension only affected a small area. 'I don't see that as being a deal breaker,' said Brian Bethune, an economics professor at Boston College. 'The problem would be, if they start to have to suppress more of them or drop them out of the survey, then that could be more problematic.' Reuters

Ukraine Eyes Crypto Inclusion in National Reserves
Ukraine Eyes Crypto Inclusion in National Reserves

Arabian Post

time3 hours ago

  • Arabian Post

Ukraine Eyes Crypto Inclusion in National Reserves

Kyiv's parliament has introduced draft Bill 13356, empowering the National Bank of Ukraine to incorporate virtual assets—primarily Bitcoin—into its official gold and foreign-exchange reserves. The legislation would not compel the central bank to adopt such assets, but merely grant it the legal framework to do so. Lead author Yaroslav Zheleznyak, first deputy chair of the Rada's Finance Committee, highlighted that the bank would retain full discretion over timing, volume, and methodology of any crypto acquisitions. He described the measure as a pivotal move to 'integrate Ukraine into global financial innovations' and bolster macroeconomic resilience while catalysing the digital economy. Ukraine currently holds approximately 46,351 BTC—valued at over $5 billion—though these holdings originate from asset seizures, donations, and fundraising during wartime, and remain under civil-servant control rather than central-bank custody. If passed, the law would permit the bank to transition some of those coins into officially recognised reserves. ADVERTISEMENT The proposal mirrors a broader trend: several nations are charting similar initiatives. The United States launched a Strategic Bitcoin Reserve under an executive order issued on 6 March by former President Trump, consolidating government‑owned cryptos into a national asset. Pakistan, Brazil and the Czech Republic are exploring mechanisms to incorporate digital assets into sovereign financial systems. El Salvador, which adopted Bitcoin as legal tender in 2021, holds over 6,000 BTC, while Bhutan maintains mining‑powered reserves worth around $750 million. Yet the move is not without detractors. Critics emphasise Bitcoin's volatility, liquidity constraints and concentration within corporate entities like MicroStrategy, which undermine its suitability as a stable reserve asset. The Swiss National Bank's governor, Martin Schlegel, reaffirmed this stance on 25 April in Bern, warning that crypto lacks the stability and liquidity required for central‑bank reserve portfolios. ECB President Christine Lagarde has echoed similar concerns, stating that digital assets do not meet the criteria for eurozone reserve holdings. Proponents argue that strategic inclusion could buffer Ukraine against inflation and currency devaluation, offering rapid, secure transferability unmatched by physical assets. Zheleznyak's Telegram statement emphasised that implementation would be fully at the central bank's professional discretion. Operationalising the proposal will require establishing robust legal and procedural frameworks: anti‑money‑laundering protocols, cybersecurity safeguards, digital custody infrastructure, and accounting mechanisms. Banking analysts suggest that careful integration and risk management will be essential to balance innovation with financial stability. Ukraine's draft arrives amid growing global debate on digital money. Central bank digital currencies are being piloted worldwide, such as Turkey's digital lira, China's e‑renminbi, and Nigeria's e‑Naira. Meanwhile, debates continue over whether public‑sector balance sheets should venture into decentralised finance or maintain traditional gold‑forex portfolios. As parliamentarians prepare to debate Bill 13356, attention will turn to amendments that might specify asset types, risk parameters, and accounting standards—or narrow discretionary power for the central bank. The legislation must also align with IMF frameworks and comply with anti‑money‑laundering regulations.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store