Economic Jitters: Tariff Impact Roils Global Markets

Investors are facing uncertainty as U.S. tariffs under President Trump influence global markets. Economic data shows a stalling U.S. economy with a widening trade deficit. European car companies and Swiss bank UBS express concerns. Oil prices drop, indicating wider economic pressures and potential shifts in Federal Reserve policies.

Investors are grappling with uncertainty amid the impact of U.S. President Donald Trump's tariffs, as revealed by economic data suggesting a stalling economy. The U.S. GDP for the first quarter could show a contraction, driven by businesses preemptively importing goods to dodge tariff-induced costs.

Conviction among economic analysts is mixed, with BNP Paribas forecasting a GDP contraction while maintaining that the data won't decisively alter Federal Reserve policy. As PCE inflation data arrives, it may reveal the Fed's room to adjust interest rates. European automotive giants and UBS echo cautious sentiments, blaming tariffs for suspending profit forecasts.

Wednesday saw oil prices plunge significantly, highlighting the global economic strain from trade disruptions. The euro zone's unexpected economic growth provided some relief, but the broader market malaise persisted with the S&P and Nasdaq futures. Key oil benchmarks, Brent and WTI, are on track for their worst monthly decline in over three years.

(With inputs from agencies.)