Based on recent reports, a combination of factors is causing a rapid decline in major international markets. The primary reason appears to be the introduction of new, broad tariff policies by US President Donald Trump.
Here is a breakdown of the key reasons:
* New US Tariffs: President Trump has imposed a fresh wave of tariffs on imports from several countries, including India, Canada, and Mexico. These tariffs, ranging from 10% to 40%, have sent shockwaves through global markets, reviving concerns about trade wars, supply chain disruptions, and rising inflation. The uncertainty created by these policies is a major driver of market sell-offs.
* Weak Economic Data: Weak jobs reports in the US have heightened market concerns. The reports indicate a significant slowdown in hiring and a decrease in job numbers from previous months, raising fears of economic weakening and potential recession.
* Continuous Outflow of Foreign Institutional Investors (FII): In countries like India, FIIs are continuously selling shares, contributing to a widespread aversion to risk. This trend of selling has been exacerbated by the rising US Dollar Index and the notion that other markets, such as China, offer better growth prospects.
* Corporate Earnings and Investor Sentiment: Some companies have reported disappointing earnings, and many have warned that the new tariffs will affect their profits. This has further diminished investor confidence and fueled a downward trend.
Uncertainty in Trade Negotiations: While the US has reached a framework agreement with the European Union, the lack of agreements with other key trading partners, such as India, is contributing to overall uncertainty and negatively impacting market sentiment.#TrumpTariffs #MarketPullback #FOMCMeeting