(FOX 2) – The stock market is plunging. The US financial market spiraled after President Donald Trump imposed tariffs on Thursday, with fear and uncertainty being felt from Wall Street to Main Street.Â
Big picture view:
FOX 2 spoke with financial experts on Friday, as markets faced their worst crisis since the COVID crash after China matched Trump’s big raise in tariffs in an escalating trade war.
Trump announced a minimum tariff of 10% on global imports and much higher taxes on products from China, the European Union and even smaller countries like Vietnam, slapped with tariffs of 49%.
What they’re saying:
Meanwhile, associate professor of finance Thomas Shohfi from Wayne State University says many people will not be spared from these recent impacts.Â
“It’s going to be highly inflationary, it’s going to be a big dent in the consumers’ budget,” he said. “The market is rife with fear. They don’t know how bad a recession could be, how badly this will damage the economy, how bad it will damage the dollar. There are so many moving parts in place that it’s very difficult to think about when this rout is gonna end.”
Shohfi said for those who may be looking to hit the panic button, to just take it back and keep doing what you are doing, including;
- Investing periodically
- Having a clear plan
- Setting goals
“If you need to rebalance, that’s something I did this week,” he said. “You really don’t want to make rash decisions when you see this type of volatility in the market.”
Federal Reserve Chairman Jerome Powell also weighed in on the matter, saying the economy is still in a good place.Â
“While uncertainty is high and downside risks have risen, the economy is still in a good place. Incoming data shows solid growth, a labor market in balance, and inflation running much closer to but still above our 2% objective,” he said.
The backstory:
On Friday, the S&P 500 plummeted 6%, the Dow Jones Industrial Average plunged 5.5% and the Nasdaq composite dropped 5.8%.
According to the Associated Press, markets are facing their worst crisis since the COVID-19 pandemic in 2020 after China matched President Donald Trump’s big raise in tariffs in a developing trade war.
Meanwhile, financial experts are advising people to be patient.
“Until the tariff resolution comes about and these tariffs are either done away with or some type of relief provided, I don’t think you’re going to see returns to previous levels,” Shohfi said.
The Source: FOX 2 used information from previous reporting and talked with Federal Reserve Chairman Jerome Powell and associate professor of finance Thomas Shohfi.
