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The announcement by US President Donald Trump about February 1 tariff implementation started a market reaction that caused Dow futures to drop near 1%. The market value of gold and crude oil experienced rapid growth throughout the night when investors turned to these safe assets.
The White House announced that Donald Trump would initiate 25% Mexico and Canada and 10% China trade tariffs starting from Saturday. Wall Street experienced a negative market performance after this proclamation removed previously gained values.
Financial markets reacted by showing increased interest in bond yields and crude oil prices and strengthening gold price rates.
During the day the US 10-year Treasury yield increased by two basis points to reach 4.54%.
The price of WTI crude oil surpassed $74 per barrel as crude oil values rose.
The market demand for safety pushed gold prices past $2,800 per ounce as they reached their highest recorded value.
The CBoE VIX which acts as the leading indicator of market turbulence experienced an increase on Friday because of rising trade policy doubts.
The White House defends its trade protections through tariffs during international concern.
White House spokesperson Karoline Leavitt explained that these tariffs serve to battle against illegal fentanyl imports from these three countries because they have resulted in the death of millions of Americans.
The White House dismissed an Reuters publication about pending tariff exemptions while denying any delay of the implementation would extend beyond March 1.
Trump Defends Tariffs, Dismisses Bargaining Theory
The president denied that these threats functioned as part of trade negotiations when he answered “No, it's not ... we have big trade deficits with all three of them.”
RJO Futures senior market strategist Bob Haberkorn shared to CNBC that investors watch and wait because of rising international trade conflicts.
Investor Sentiment Remains Volatile
The market uncertainty about tariffs harms investor optimism according to Max Gokhman who works for Franklin Templeton Investment Solutions.
Analysts predict the financial markets will react strongly to trade threats which Trump escalated after his inauguration since these discussions started last year.
Economists Fear Inflationary Impact
The federal economist community in the United States shows growing concern about fresh trade barriers because they might create inflationary challenges after price declines became visible in America's economy.
The rising trade conflicts between nations will continue to generate market instability across global financial markets through the upcoming times.
