US stocks slide as Trump tariffs target 60 nations

US stocks fell Wednesday as President Trump unveiled a new round of tariffs on 60 trading partners and oil prices climbed, compounding concerns about inflation and trade disruption.

The selloff followed Trump's announcement that the US Trade Representative had proposed duties of as much as 12.5% on imports from 59 countries and the European Union under Section 301 authority, citing failures to enforce forced-labor bans. Brent crude rose 0.7% to $94.29 a barrel, adding to pressure on equities as energy costs threatened to feed into consumer prices.

"The combination of tariff escalation and rising energy costs creates a stagflationary backdrop that equity markets haven't priced in," said Michael Wilson, chief equity strategist at Morgan Stanley. "Investors are recalibrating expectations for both growth and inflation simultaneously."

The decline was broad-based, with energy and industrial sectors leading losses as traders weighed the impact of higher input costs and disrupted supply chains. The move reversed some of the gains from a strong May that saw the S&P 500 notch its ninth straight weekly advance and the Nasdaq Composite rally more than 8% for the month.

Tariffs Revive Trade War Fears

The proposed levies target China, Brazil, South Korea, Switzerland and the UK at 12.5%, while goods from the EU, Canada and Mexico would face 10% duties. The action marks Trump's most aggressive effort to rebuild his tariff agenda after the Supreme Court struck down earlier duties imposed under the International Emergency Economic Powers Act.

Jamieson Greer, the US Trade Representative, said investigations found the targeted countries had failed to enact or effectively enforce laws prohibiting imports made with forced labor. The administration has also opened a separate probe into "excess manufacturing capacity" among 16 of America's largest trading partners.

Cross-Asset Pressure Builds

The US 10-year Treasury yield edged lower to 4.45% as investors sought safe-haven assets, while gold rose 0.9% to $4,522.28 an ounce. The dollar held steady against major peers, with the euro at $1.1638 and the yen at 159.89 per dollar.

European equities fared better, with the FTSE 100 closing up 0.3% at 10,373.51 and the CAC 40 rising 0.8%, as investors remained broadly optimistic that a longer-term resolution to Middle East tensions could be reached. But the tariff announcement threatens to dampen that outlook, with trade-sensitive sectors across the region facing renewed headwinds.

The next catalyst for markets comes later this week with the May US jobs report, which will provide the latest read on labor market conditions as the Federal Reserve navigates competing inflation and growth risks.

This article is for informational purposes only and does not constitute investment advice.