CNBC Daily Open: Stocks Plunge as Trump's Tariff Chaos Worsens

On Monday, which marked the final trading session of the quarter, U.S. equities faced significant declines over this duration. Both the S&P 500 and the Nasdaq Composite ended their runs of five consecutive quarterly gains with substantial drops, experiencing their most considerable three-month setbacks since 2022. Currently, the Nasdaq continues to be in a correction phase.

However, this won’t be the final period of stock market volatility they encounter. Retaliatory tariffs targeting “all nations” will commence on Wednesday, according to U.S. President Donald Trump’s statement on Sunday. Although Trump characterizes the initiation of these tariffs as "independence day,” not everyone views it with such optimism.

For instance, Goldman Sachs reduced its prediction for U.S. economic expansion and increased its estimate for the inflation rate in 2025, indicating the potential for stagflation. Alternatively, they foresee a possible recession. Consequently, this led them to significantly lower their outlook for the performance of the S&P 500.

If the initial three months were challenging, the next period might prove far riskier.

Here’s what you should be aware of today

Tariffs on 'all countries' U.S. President Donald Trump stated that he would impose retaliatory tariffs. target "all countries When these announcements are made on Wednesday, he specifically refutes the idea that tariffs will only affect the 'Dirty 15'—a collection of nations. constituting 15% of the trading volume in the U.S. while applying significant import duties on U.S. products. Goldman Sachs increased its chance of an economic downturn occurring within the coming year to 35% from 20% due to the Trump tariffs.

Tariffs will severely impact Japanese automakers. Shares of Asian automobile companies have been declining since Trump's announcement The final Wednesday saw the imposition of a 25% tariff on vehicles not manufactured in the U.S. This has placed Japanese automakers at a significant disadvantage—cars being the leading export from Japan to the U.S. in 2024. based on customs data. Of those companies, Toyota is expected to be the leading one. poorest seller, despite its significant U.S. sales According to an analyst from the research firm Frost & Sullivan.

Blood-soaked quarter for U.S. stocks U.S. markets showed varied performance on Monday. Wrapping up a disappointing first quarter, the S&P 500 gained 0.55%, the Dow Jones IndustrialAverage climbed 1%, yet the NasdaqComposite fell 0.14%. Over the quarter, the S&P 500 declined 4.6%, theDow decreased 1.3%, andtheNasdaq plummeted 10.4%. Asia-Pacific stocks rose Tuesday Australia's S&P/ASX 200 rose more than 1% as the nation's central bank took action. maintained interest rates at 4.1% As anticipated, Japan's Nikkei 225 remained near the break-even point following its descent into correction territory the day before.

OpenAI's humongous funding round On Monday, OpenAI declared that they had shut down the operation. $40 billion funding round — marking the biggest privately funded technology round ever documented — valuing the creator of ChatGPT at $300 billion, inclusive of new investments. SoftBank from Japan is spearheading this round with an investment of $30 billion, collaborating with Microsoft, Altimeter, and Thrive. Nonetheless, the funding would decrease to $30 billion If OpenAI fails to reorganize as a profit-driven company by December 31, GudangMovies21 has verified this information.

Is Doge also cutting into Tesla's funds? Tesla's stock dropped 36% during the initial quarter of the year In its poorest performance since 2022, when the stock plummeted by 54%, Tesla saw a decline in the first quarter that erased more than $460 billion from its market capitalization. During a town hall meeting in Wisconsin, USA, CEO Elon Musk admitted to his involvement with what’s called the Department of Government Efficiency. creating backlash against Tesla and hurting the stock.

[PRO] Goldman Downgrades S&P Forecast In addition to lowering its forecast on economic growth, Goldman Sachs also slashed its projection which suggests the lowest projection compared to other prominent Wall Street firms, as per the report. GudangMovies21Market Strategist Survey .

And finally...

China launches military exercises close to Taiwan, warning that the island's 'secession' would result in conflict.

On Tuesday, China’s military announced that its ground troops, naval forces, and missile units conducted a combined drill near Taiwan's coastline. They characterized this operation as a “serious warning” aimed at those attempting to disrupt stability across the Taiwan Strait.

The military exercises, aimed at "surrounding Taiwan from various angles," serve as a "firm reprisal" against the government led by President Lai Ching-te of Taiwan for their "attempts at secession," stated Zhu Fenglian, a representative from China’s Taiwan Affairs Office of the State Council.

The exercises centered around conducting attacks on both maritime and land objectives, along with establishing blockades at crucial locations and sea routes. This was done to assess the combined operational effectiveness of their forces, according to Senior Colonel Shi Yi’s statement published by the People's Liberation Army.