The tech-dominated Nasdaq Composite Index has fallen more than 20% from its recent record high, as investors shunned riskier assets on fears that President Donald Trump’s tariffs could ignite a trade war and tip the global economy into recession.
On Wednesday, Trump imposed a 10% tariff on all imports into the United States, along with hefty tariffs on technology powerhouses like China, Taiwan, and Vietnam.
This deepened a sell-off triggered by concerns about AI spending that had pushed the Nasdaq into correction territory earlier last month.
Economists fear a global recession due to the new tariffs imposed by the US president, which some believe will trigger a backlash that will push the global economy into recession and inflation, contrary to what US President Trump expects.
The new tariffs will have a significant impact on the US economy, increasing prices and inflation, and may even lead some countries to impose bans on US goods, particularly those with significant trade with the US, such as Canada, Mexico, and some European countries.
