Wall Street rallies despite US-EU tariff war

Stock markets surged on both sides of the Atlantic as investors brushed off escalating trade tensions between the US and the EU.

The Nasdaq Composite climbed 1.6% to 17,713.82, while the S&P 500 rose 0.6% to 5,607.96 in early trading.

Global markets have experienced sharp swings this month as Donald Trump warned that the American economy is entering a “period of transition” while pressing ahead with his tariff agenda.

However, despite the EU’s announcement of retaliatory measures in response to the US president’s 25% tariffs on steel and aluminium, which took effect today, investors remained optimistic. The Dow Jones Industrial Average dipped 0.3% to 41,294.32.

Markets jumped after annual US consumer inflation slowed more than expected, dropping to 2.8% in February—the first full month since Trump’s return to the White House.

In Europe, the FTSE 100 was up 0.3%, while France’s CAC 40 gained 0.7%, and Germany’s DAX surged 1.5%.

Goldman Sachs Lowers Wall Street Outlook Amid Escalating Trade War

Goldman Sachs has downgraded its stock market earnings forecasts as the U.S. trade war intensifies.

The investment bank cut its earnings-per-share growth estimate for the S&P 500 from 9% to 7%, following a downward revision of its U.S. GDP forecast.

Earlier this week, Goldman’s U.S. economics team reduced its 2024 growth projection from 2.4% to 1.7%, citing the economic impact of President Donald Trump’s latest wave of global tariffs.

The S&P 500 has dropped 9% over the past three weeks, as markets reel from the policy uncertainty.