US stock markets and oil prices accelerated their decline amid the policies of the new administration and a worsening outlook for the US economy

Market hopes that the new US administration would quickly “make America great again” have been dashed in a month, which, against the backdrop of possible problems in the economy, led to a sharp drop in the Conference Board consumer confidence index on Tuesday by 7 points to an 8-month low of 98.3 points (with expectations of a drop to 102.5 points), which was the biggest drop in 2.5 years and the third consecutive monthly decline.

During the week, the S&P 500 ($SPX) index fell by 3% to 5,955 points, the Dow Jones Industrial Average ($DOWI) index fell by 2.3%, and the Nasdaq 100 ($IUXX) – by 5.4% – to 19,026 points. The bitcoin price collapsed by 9% in three days to $88,800, which indicates the exit of large speculative funds from crypto assets that they purchased at high prices. This may lead to a fall in shares of companies that are significant owners of cryptocurrencies. An additional blow to the crypto sector was caused by a large-scale hack of the Bybit crypto exchange by North Korean hackers worth $1.5 billion.

According to Bloomberg, the Trump administration plans to tighten controls on chips in China and pressure European and Asian countries to restrict the sale of chips and equipment for their production to Chinese companies.

Yesterday, at a joint press conference with French President Emmanuel Macron, Trump said that the introduction of tariffs on imports from Mexico and Canada would go ahead as scheduled, although the introduction of reciprocal tariffs could slow down the economies of not only these countries, but also the United States itself. Recall that Trump postponed them until March 4 after talks with the leaders of Mexico and Canada.

An example of the impact of politics on business was Tesla, whose shares fell by 8%, and the company’s market capitalization fell below $1 trillion for the first time in three months, and Tesla’s sales in Europe fell by 45% in January due to Elon Musk’s support of right-wing politicians in the EU, although sales of other automakers in Europe increased.

The US economic problems and the Trump administration’s plans to resume trade with Russia have caused oil prices to plummet, with April Brent crude futures falling 4.8% to $73/barrel in three sessions (-4.5% for the month), and WTI crude falling 5.2% to $68.9/barrel (-5.2% for the month).

Analysts believe that improving relations between the United States and the Russian Federation and negotiations on the war in Ukraine could lead to a reduction in sanctions against the Russian Federation and a full resumption of oil exports.

Lower oil prices and increasing uncertainty about the US and Chinese economies will put pressure on commodities, whose prices are falling amid falling global demand.

Tags: USA