The CBOE Volatility Index (VIX) is rising nearly 9% today as investors react with fear to Donald Trump’s warning. The former president first suggested he may impose a 25% tariff on Apple (AAPL.US, shares down nearly -4% in pre-market trading), a private company. He then announced that, starting June 1, 2025, the U.S. will impose 50% tariffs on Europe due to what he described as unfair restrictions placed on American products.
The market is interpreting this as “the opening of a new front” in the trade war, and it's still unclear whether a potential agreement with Europe will be “as easy” as the one signed with China in Geneva. Europe remains a critical market for the United States in many respects, and increased tensions between Washington and Brussels could signal higher inflation in the U.S. and further reduce the likelihood of any Fed rate cuts this year.
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Source: xStation5
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