Nasdaq Drops 2% as Tariff Concerns Weigh on Markets

On Wednesday, the Nasdaq stock market fell 2%, and this drop was mainly due to worries about tariffs. People were anxious to hear what U.S. President Donald Trump would say about new tariffs on cars. The Nasdaq and other global markets lost value, marking their biggest slides in two weeks.

Here’s what happened:

– Across Wall Street, stocks were down, with tech companies hit really hard. The technology sector fell 2.5%, making it the worst performer among the S&P 500. Major companies like Super Micro Computer dropped 9%, while Nvidia and Tesla fell about 5.6% each.
– The British finance minister, Rachel Reeves, mentioned that the UK is facing tough economic challenges, and this has also affected the British pound, which lost 0.5% against the dollar.
– Oil prices increased to a three-week high because of U.S. inventory data and fears of less global supply.
– In Brazil, rising political issues are making investors worried, especially after a court decision to try former President Jair Bolsonaro for a supposed coup attempt.

When Trump spoke about tariffs, he seemed serious about moving forward. If he imposes these tariffs, inflation could go up, and growth could slow down, which worries investors. With the quarter ending soon, many are playing it safe and reducing their risks in the market.

In the UK, Rivin’s recent report showed that inflation expectations are rising, which can lead to problems. An independent watchdog now predicts the UK’s growth will be only 1% by 2025, down from earlier expectations.

Despite a slight relief on Wednesday due to planned spending cuts and lower debt issuance, the UK’s financial future looks tough. Investors may demand higher returns for lending money to the government, which could affect the economy negatively. British public finances are under strain, and there are fears of rising inflation and the impacts of any new tariffs imposed by the U.S.

The article mentions that the share of foreign investors holding UK government debt is at its highest level since 2009. This reliance on foreign investors can be risky; they may be the first to sell their shares in times of uncertainty.

Experts suggest that the UK’s bonds might look cheap, but the heavy borrowing needed makes the situation complex and risky for investors. It’s clear that the British finance minister has a tough job ahead.

What’s Coming Up:
– Results from the Industrial and Commercial Bank of China.
– Final estimate for U.S. GDP for Q4.
– U.S. weekly jobless claims report.
– Several U.S. Federal Reserve officials will speak, including Vice Chair Michael Barr.
– U.K. Prime Minister Keir Starmer will meet with President Trump.