The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100 Index, plummeted 5.01% in Thursday's pre-market trading, as investors reacted to President Donald Trump's announcement of sweeping new tariffs that threaten to ignite a global trade war. The sharp decline reflects growing concerns about the potential impact on tech-heavy Nasdaq stocks and the broader U.S. economy.
President Trump's tariff plan includes a 10% baseline tariff on all imports to the United States, with higher duties imposed on some of the country's biggest trading partners. China faces a staggering 34% tariff, while the European Union will be subject to a 20% tariff. Other major economies, including Japan, South Korea, and India, will also face significant tariffs ranging from 24% to 26%.
Wall Street analysts have expressed alarm at the scale of these tariffs, with many describing the move as "worse than expected." Experts warn that these measures could lead to higher inflation, reduced consumer spending, and delayed business investments. The technology sector, which heavily relies on global supply chains, is particularly vulnerable to these trade tensions. As a result, investors are rapidly de-risking their portfolios, leading to aggressive selling of tech names and contributing to the QQQ's sharp decline.
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