S&P 500, Nasdaq Near 52-Week Lows as Wall Street Frets Over US-China Tariff Jitters

S&P 500, Nasdaq Drops: US markets are clearly not immune to Trump's tariff play. This was evident earlier this week as S&P 500 and tech-heavy index Nasdaq neared 52-week-lows. Investor sentiment turned jittery as the US doubled down the 'retaliatory' tariff play on Chinese imports.

The tit-for-tat tactics have pushed the overall tariff rate on Chinese imports to an astounding 104%. Both nations have refused to back down, with Beijing calling the tariff play nothing short of 'blackmail' and vowing 'to fight it to the end.'

The S&P 500 index is now trading at one-year low level mark, slipping below the 5,000 mark. The Nasdaq followed suit, dropping over 300 points, or more than 2.15%, earlier this week. Meanwhile, the Dow Jones Industrial Average ended yesterday’s session at 37,645, down 370 points or 0.84%. Initially, Trump had announced a 34% tariff rate on China. After Beijing's retaliatory play of imposing 34% tariffs on American products, US threatened to slap another 50% duty on Chinese imports.

Beyond Wall Street, global markets are also reeling under pressure. Japan’s Nikkei tumbled 3.6%, shedding nearly 1,200 points, while the Hang Seng Index slipped over 312 points.

"With a whopping 104% tariffs on China likely to kick in today, 'there is blood on the streets.' Uncertainty reigns supreme. How global trade and the global economy evolve from this chaos remains to be seen," said VK Vijayakumar, chief investment strategist, Geojit Investments.

Impact on Indian Markets

Back home, benchmark indices Sensex and Nifty are also feeling the heat amid escalating trade war concerns. However, Indian markets have held up relatively better compared to their Asia-Pacific peers.

"Two things are clear: India will be one of the large economies least impacted by this Trump shakeout. Our domestic consumption segments are resilient. The 25 bp cut in policy rates expected in the monetary policy announcement today can give a further monetary stimulus to the economy," said Vijayakumar.

The crash in crude is a big positive for the Indian economy. Of course, a global recession, or worse, stagflation, can do a lot of damage, so investors should be cognizant of the same, he added.