US stocks experienced turbulent trading on Wednesday, continuing their recent erratic behavior and extending the selloff from earlier sessions. This was largely due to heightened tensions from aggressive US tariffs and retaliatory measures from key trading partners, fueling fears of an impending recession. The S&P 500 fluctuated near the critical 5,000 mark, while the Dow and Nasdaq remained close to the lowest levels seen in over a year.
The situation escalated as China increased its tariffs on US imports to 84% and added several companies to its no-export list, responding to the US's cumulative tariff hike to 104%. Simultaneously, the European Union announced tariffs on $22 billion worth of goods. These developments have sparked concern about an upcoming recession and fostered doubts regarding President Trump's willingness to engage in bilateral discussions with international leaders.
The market was further pressured by a bond selloff and the anxiety surrounding potential forced asset liquidations to secure cash. Notably, shares of Merck, Eli Lilly, and AbbVie slumped between 3% and 5% after President Trump threatened to impose tariffs on pharmaceutical components. Conversely, the tech sector saw significant gains after a period of underperformance earlier this month.
