- Trump’s tariffs have sent shockwaves through financial markets, with the S&P 500 erasing $2.5 trillion in market cap and oil prices plunging 7% as global demand weakens
- Crypto markets reacted sharply, with Bitcoin down 5%, Ethereum down 4.56%, and the total market cap dropping from $2.78 trillion to $2.64 trillion, wiping out $140 billion
- Inflation concerns rise as the weighted-average US tariff rate hits 29%, the highest since the Great Depression, potentially increasing consumer costs and reducing purchasing power
The economic fallout from Trump’s Liberation Day is still rumbling across all financial markets. Today’s date April 3rd was marked by extreme volatility across stock and crypto — showcasing how uncertain investors are in current times.
The weighted average US tariff rate soared to 29%, the highest since the Smoot-Hawley Act during the Great Depression, as detailed by The Kobeissi Letter. This data measures the average import tax rate, weighted by the volume of trade. Such a high reading means that imported goods are being taxed at unprecedented levels.
Ultimately this will more than likely result in increased consumer costs, drastically affecting the average American purchasing power and influencing the nation’s inflation rate.
Traditional Finance in Turmoil
The stock market and commodities are reacting swiftly to the new tariff landscape, with key sectors experiencing significant losses.
- Oil prices plunged 7% as markets brace for declining global demand; analysts warn prices could drop 40%+ if tariffs remain long-term
- Inflation is projected to rise to 5.0%-5.5%, with Canada being the only other country expected to face a 2%+ price surge
- The S&P 500 swung from a +100 point gain to a -200 point drop, erasing $2.5 trillion in market cap, marking one of the worst single-day declines since the 2020 pandemic crash
- The Trade Policy Uncertainty Index has surged to record levels, tripling the peak uncertainty seen during Trump Trade War 1.0
- Nike stock cratered, now 70%+ below its all-time high, following a 46% tariff on goods from Vietnam
Crypto Market in Turmoil
The crypto sector has not been spared from the chaos, as major assets tumble alongside traditional markets. The total crypto market cap has fallen from $2.78 trillion pre-tariffs to $2.64 trillion, wiping out $140 billion in value within hours.
The cryptocurrency sector was also affected by the economic chaos seen on this date. On April 3 — nearly all assets on the market have seen losses as high as 9% in 24 hours.
- Bitcoin plunged 5%, currently trading at $81,982, as investors react to macroeconomic instability
- Ethereum dropped 4.56%, following broader trends of uncertainty
- The CoinMarketCap 100 Index (CMC100), designed to provide an unbiased view of crypto markets, fell 4.10%, reflecting widespread declines
- Dormant wallets moved 15,838 BTC worth $1.3 billion, raising concerns about potential whale sell-offs
The crypto market remains highly volatile as investors weigh the implications of these tariffs alongside inflation concerns, declining liquidity, and global trade disruptions. While the almost unavoidable inflationary growth is set to trouble any hopes for renewed growth in the short future, as liquidity tightens and the demand shifts — it will be interesting to see if Bitcoin and other cryptocurrency assets are able to maintain strong institutional interest and support, perhaps even proving its worth as a hedge against inflation
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