The destructive trade policy has disrupted the market

By John Barbon

The bearish sentiment is pervading the Wall Street right now, when the S&P 500 follows the Nasdaq into correction territory. After Thursday’s sell-off, the S&P 500 has joined the Nasdaq Composite in correction territory, which is typically taken to mean a decline of 10% or more from a recent high.

it seems the equity markets have peaked in Dec unexpectedly since Donald Trump won the election overwhelmingly. People are extremely optimistic about what will happen in the economy down the road. Maybe too far east is west. All good news have been baked in. With President Trump's inauguration, more policies started to be in place, including tariffs which Trump claims that US will impose tariffs on any imported goods, no matter where they come from.

Trump is keeping his words to impose tariffs on imported goods from Canada, Europe, Mexico and China. The back and forth negotiations with trading partners create much more uncertainties which dragged the market sentiment seriously, resulting in the significant sell-off across all the indices.

Par for the course, the market hates the uncertainty. Although the President claims that what he has done is for the long term national interests, it is short- term pain for long-term gain, but the question is how much is the pain and how long it will last.

Right now the market is in a chaotic environment. Multiple uncertainties is hitting the market heavily, and the narratives of stagflation and recession are prevailing in the market, which are further hitting the sentiment and sell-off is continuous as a result of them. In another words, the cracks have formed in the market, it will not recover over night.

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