Global stock markets experienced a downturn on , reacting to renewed uncertainty surrounding US trade policy following President Donald Trump’s pronouncements in the wake of a Supreme Court ruling. European markets closed with losses, while Wall Street saw more significant declines, fueled by both trade concerns and anxieties surrounding the potential impact of artificial intelligence on various sectors.
The CAC 40 in Paris fell 0.22% to 8,497.17 points, and the EuroStoxx 50 lost 0.27% to 6,114.49 points, according to reports from European financial markets. Across the Atlantic, the Dow Jones Industrial Average dropped 1.53%, and the Nasdaq Composite fell 1.26%. The volatility index (VIX) surged 12%, indicating heightened investor nervousness.
The turbulence stems from President Trump’s response to the Supreme Court’s decision regarding his authority to impose global tariffs. While the court ruled against the scope of his initial tariffs, Trump asserted on his Truth Social network that the ruling inadvertently expanded his presidential powers concerning tariffs and licensing. He stated he could utilize these powers in a “much more powerful and obnoxious way.”
Trump’s comments included a claim that the court had “accidentally and unwittingly” granted him greater authority, and he questioned why the US could not charge fees for licenses, as is common practice. He also criticized the justices, with the exception of the three who supported his position in the ruling, calling them “incompetent.”
The European Parliament has responded by suspending, for a second time, the ratification process of the trade agreement between the European Union and the United States. This move follows the Supreme Court’s invalidation of the tariffs, raising questions about the financial implications for the US government. Lizzy Galbraith, a senior political economist at Aberdeen Investments, noted that the tariffs had become a significant revenue source for the US, and their removal could necessitate refunds of previously collected amounts – a point not addressed by the court’s decision, leading to anticipated legal challenges.
Adding to market anxieties, concerns about the disruptive potential of artificial intelligence resurfaced. Anthropic’s announcement of an AI tool capable of automating tasks traditionally performed by expensive consulting teams triggered a sell-off in related sectors. Shares of IBM fell 11%, while Accenture and Cognizant Technology also experienced declines. The broader fear is that AI will disrupt business models and squeeze profit margins across industries, including software, real estate, and logistics.
Despite the overall negative trend, some economic indicators offered a glimmer of positivity. Germany’s Ifo business climate index exceeded expectations in , reaching 88.6 points, its highest level since . However, US durable goods orders declined by 0.7% in , reversing a 2.7% increase in the previous month.
Within European markets, several companies faced specific pressures. Exosens, a technology firm, saw its stock price fall by 9.59% despite reporting strong annual results, ending a seven-day winning streak. Automotive equipment supplier Forvia dropped 7.95% due to disappointing outlooks from its German subsidiary, Hella. Pernod Ricard, a spirits company, experienced a 3.50% decline following a downgrade from Deutsche Bank.
Novo Nordisk, a Danish pharmaceutical company, suffered a significant setback, with its shares plummeting 16.48% following disappointing results from a study on an anti-obesity treatment.
Currency markets also reflected the uncertainty, with the euro weakening 0.18% to 1.1800 dollars. Oil prices, however, edged higher, increasing by nearly 1%.
The situation remains fluid, with investors closely monitoring further developments in US trade policy and the evolving landscape of artificial intelligence. The upcoming earnings report from Nvidia, a key player in the AI chip market, on , is expected to provide further insights into the sector’s trajectory and potential risks.
