The tariff drama is reverberating across global markets, with a different impact depending on the region and the asset itself. Some markets, previously considered highly sensitive to extra tax charges, are actually doing better than the dominant stocks on Wall Street. Or maybe that's just the calm before the storm?
Since Donald Trump officially stepped into the top job in American politics (and started the whole tariff narrative) the Europe-wide Stoxx 600 index has gained roughly 6% to date, leaving Wall Street equities in the dust. Its US counterpart, the S&P 500 is up about 2.5% over the same time span.
This is the old continent's best opening since the 1980s. That is, while European countries struggle to power up their economies and the European Central Bank is dropping interest rates fast.
The tech-heavy Nasdaq Composite has fallen out of favor and is languishing around with a 2.2% increase since Trump took office. Moreover, the elite club called the Magnificent Seven is barely getting by. Except for Meta, which is up more than 20% this year, all the others are either underwater or head above the water.
Trump is gradually rolling out his punishing tariffs, but European investors don't seem too scared. Earlier, the U.S. President revealed his intentions to slap the auto industry with a hefty 25% tariff starting April 2. Drugs and chips got picked on, too, with levies in the same neighborhood.
The auto space in Europe is bound to feel the weight of that auto tariff decision. Currently, Europe's car manufacturers are taxed with a 2.5% levy on their way to the US. In the other direction, however, the US is obligated to pay a 10% duty when it imports cars into Europe.
Gold is apparently the biggest winner of the tariff threat. As long as it doesn't get slapped with one. The price of gold has skyrocketed to levels near $3,000 per ounce, breaking its record. The asset is up 15% since mid-December with no corrections and no signs of slowdown.
The US dollar has been taking blow after blow, giving rival currencies some much-needed reprieve. The dollar index, measuring the buck's strength against six forex rivals, is down about 3% from its two-year peak in early January.
Bitcoin has been pretty tamed up as Trump's crypto working group has stayed mostly tight-lipped over the prospects of crypto-friendly legislation. Prices of the orange coin celebrated inauguration day with an all-time record but have slipped 11% since then to dive back under $100,000.
