The Dow Jones Industrial Average (DJIA) dropped on Wednesday, falling below the 42,500 mark and ending its recent winning streak as concerns over new tariff announcements from the Trump administration shook investor sentiment. U.S. President Donald Trump escalated trade tensions with new tariff threats targeting copper, automobiles, and European goods, while signaling plans for broader “reciprocal” tariffs set to take effect on April 2.
Reports indicate that the Trump administration intends to implement a 25% tariff on all copper imports, mirroring the recent tariffs imposed on steel and aluminum. Additionally, Trump is expected to announce new tariffs on automobiles, with European Union (EU) officials anticipating a 20% tariff on a range of goods, although the specifics remain uncertain. These moves are expected to coincide with the imposition of “reciprocal” tariffs, where the U.S. would match tariffs from countries that impose trade barriers on U.S. products. Trump has also floated the idea of including VAT (Value Added Tax) or luxury taxes as part of these reciprocal tariffs.
On the economic front, U.S. durable goods orders rose by 0.9% in February, surprising analysts who had forecast a 1.0% contraction. Although this figure exceeded expectations, it remained significantly lower than the revised 3.3% growth recorded in January.
Policymakers and financial analysts have raised alarms about the long-term effects of the Trump administration’s trade policies. Standard & Poor’s (S&P) Global ratings agency now estimates a 25% chance of a U.S. recession within the next year, citing “policy uncertainty” as a major risk to North American credit conditions.
In stock market news, equities were down across the board on Wednesday, with investor sentiment dampened by growing trade war fears. Technology stocks were particularly hard-hit, with the Nasdaq Composite plunging 420 points, or 2.3%. The Dow Jones fell more than 250 points, or 0.5%, closing at 42,350, while the S&P 500 lost 80 points, or 1.4%.
Dow Jones Price Forecast: The Dow Jones Industrial Average faces a potential downside challenge after a brief rally, with the index now poised for a decline toward the 200-day Exponential Moving Average (EMA) near 42,090. Technical indicators suggest that while bulls may still have room to maneuver, a climb back to record highs above 45,000 remains distant. On the downside, a continued slide could see the Dow falling below its recent swing low, potentially reaching as low as 40,660.
