Six months into his second term, one of the defining features of U.S. President Donald Trump\u2019s time in office appears to be his continued use of tariffs as a key policy tool.<\/p>\n
From China to Mexico to the European Union,<\/a> Trump has reignited trade tensions with a barrage of new levies, fulfilling campaign promises but causing great uncertainty in financial markets and global supply chains.<\/p>\n Trump\u2019s renewed focus on his protectionist economic policy has sparked sharp reactions in global markets, commodity prices, precious metals <\/a>and oil.<\/p>\n Trump first introduced his “reciprocal” tariffs in April, imposing tariffs ranging from 10% to 50% on most countries. He suspended those tariffs for 90 days, except for China, on April 9.<\/p>\n After a back-and-forth tariff standoff with China, Washington agreed to a trade deal following a meeting in London last month, as the two sides agreed to roll back some punitive tariffs and other restrictive measures.<\/p>\n Meanwhile, many countries have been attempting to negotiate a more favorable trade agreement, which includes lower tariff rates than those introduced in April by the U.S.<\/p>\n Other countries with which the U.S. has announced trade deals are the U.K., Vietnam and Indonesia.<\/p>\n Additionally, the U.S. president has sent letters to numerous countries, informing them of the tariff rate they will be paying as of Aug. 1.<\/p>\n They include the EU and Mexico at 30% and Canada at 35%.<\/p>\n Trump also introduced new sectoral tariffs, which included a 25% tariff rate for all automotive imports in April.<\/p>\n He also introduced 50% levies on copper imports starting Aug. 1 and a 200% rate on pharma products coming into the U.S.<\/p>\n Buy the dip, sell the rip<\/p>\n During the first four months of Trump’s second term, the New York Stock Exchange experienced significant turbulence, frequently plunging into the red and wiping away substantial gains from the previous year.<\/p>\n The Dow, a key indicator of the performance of America’s largest corporations, experienced a notable decline of approximately 11.5% over four months.<\/p>\n Following the trade agreements and the easing of uncertainty, the index recovered, settling at around 44,340 points as of late July, with a 0.72% rise in the last six months.<\/p>\n Similarly, the S&P 500, another key indicator of U.S. economic health, had declined by approximately 18% over the preceding four months. It had briefly fallen below the psychologically significant 5,000-point mark, illustrating the breadth of market uncertainty.<\/p>\n As of late July, the index stood at approximately 6,296 points, up around 4% over the previous six months, reaching record levels in early July.<\/p>\n The technology-heavy Nasdaq had borne the brunt of market anxieties, experiencing the largest decline of the major indices. It plummeted 24% to 15,270 points, demonstrating investors’ growing apprehension about technology firms and their global supply chains.<\/p>\n However, over the last six months, the Nasdaq rose 5.76% to record levels of 20,895, with chip company Nvidia leading the gains.<\/a><\/p>\n The VIX volatility index, often referred to as Wall Street’s “fear” gauge, had surged dramatically. It rose an alarming 66.6% to 25, spiking briefly beyond 52 points \u2013 a record in recent years.<\/p>\n The fear index settled around 16.4 as of late July, as tariff fears eased following the uncertainty.<\/p>\n Alongside equity markets, currency markets also saw volatility. The U.S. dollar index, which measures the dollar’s strength against major global currencies, fell 10%, declining to around 98.50.<\/p>\n Conversely, the euro surged significantly, climbing approximately 13% against the dollar, settling at $1.16, compared to $1.04 six months earlier.<\/p>\n Safe-havens spike, oil dips<\/p>\n With greater initial uncertainty, investors rushed toward safer investment havens, most notably gold.<\/p>\n Gold prices soared dramatically as uncertainty spread throughout financial markets. During Trump’s first six months in office, the price surged 24%, jumping from around $2,700 per ounce in late January to $3,350 by late July.<\/p>\n In late April, gold reached a historic <\/a>high, <\/a>surpassing $3,500, reflecting growing concerns about global economic turmoil.<\/p>\n Conversely, oil markets faced downward pressure. Brent crude, the global benchmark, fell approximately 14.3%, dropping from nearly $80.2 per barrel in late January to around $68.60 by late July.<\/p>\n Market analysts attribute the slump partly to concerns that Trump’s tariffs would dampen global trade activity, reducing oil demand worldwide.<\/p>\n On the other hand, oil experienced a short-lived spike in June, after Israel and the U.S. attacked Iranian nuclear capabilities.<\/p>\n Bitcoin, another asset closely watched due to Trump’s past enthusiasm for cryptocurrency, also witnessed initial volatility before reaching all-time highs.<\/p>\n Initially buoyed by Trump’s campaign pledge to make the U.S. the global crypto capital, bitcoin had sharply declined by around 8.5% during Trump’s first three months in office.<\/p>\n However, following the easing of uncertainty after trade deal announcements and regulatory optimism, the world’s largest cryptocurrency exceeded the $120,000 threshold in July.<\/a><\/p>\n Magnificent Seven<\/p>\n Perhaps most notably affected by market uncertainty were shares of technology and innovation-driven companies, often collectively referred to as the “Magnificent Seven.”<\/p>\n