In Amsterdam, ASMLโs stock sank 5.2 per cent. The Dutch company, whose machinery makes chips, said demand for artificial-intelligence technology is continuing to drive growth. โHowever, the recent tariff announcements have increased uncertainty in the macro environment and the situation will remain dynamic for a while,โ CEO Christophe Fouquet said.
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The uncertainty around Trumpโs trade war has been scrambling plans for companies across industries and around the world. Itโs so dynamic that United Airlines gave two different financial forecasts for how it may perform this year, one if thereโs a recession and one if not.
The airline said it made the unusual move to give twin forecasts because it believes itโs โimpossible to predict this year with any degree of confidence.โ
Unitedโs stock finished roughly flat even though it reported a stronger profit for the latest quarter than analysts expected.
All told, the S&P 500 fell 120.93 points to 5,275.70. The Dow Jones Industrial Average dropped 699.57 to 39,669.39, and the Nasdaq composite sank 516.01 to 16,307.16.
Tariffs could also drive up inflation, at least temporarily, by pushing U.S. importers to pass along the higher costs to their customers.
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Fears about such price hikes drove a spending binge last month, and sales at U.S. retailers accelerated by more than economists expected. Economists said much of that was likely because of U.S. shoppers rushing to buy automobiles, electronics and other items before their prices could rise due to possible tariffs.
Recent surveys have shown U.S. households are feeling more pessimistic about the economy because of tariffs, and a fear is that it could lead them to pull back on their spending eventually, which could cause a recession by itself.
Treasury yields eased in the bond market, taking a leg lower following the comments from the Fedโs chair. The yield on the 10-year Treasury fell to 4.28 per cent from 4.35 per cent late Tuesday and from 4.48 per cent at the end of last week.
Itโs another notable move for the bond market and somewhat of a return to form after an unusual rise in yields last week rattled investors and Trump.
Treasury yields typically fall when investors are worried about the economy, and last weekโs climb raised concerns that the trade war may be causing investors to second-guess the reputation of U.S. government bonds as one of the worldโs safest possible investments.
In stock markets abroad, indexes fell across much of Asia and were mixed in Europe.
Stocks dropped 1.9 per cent in Hong Kong, 1 per cent in Tokyo, 1.2 per cent in Seoul and 0.1 per cent in Paris.
The FTSE 100 rose 0.3 per cent in London after the government said inflation in the U.K. fell for the second month running in March, largely as a result of lower gas prices.
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