Stocks worldwide are dipping due to Trump's tariffs, with the IBEX 35 witnessing a nearly 2% plunge.
In a day marked by significant economic fluctuations, global stock markets felt the brunt of the ongoing trade war and new tariffs implemented by US President Donald Trump in 2025.
On August 1, 2025, President Trump signed an executive order imposing new tariffs on nearly 70 countries, causing US stock markets to plummet. The Dow Jones Industrial Average fell 615 points (1.3%), the S&P 500 declined by 1.6%, and the Nasdaq dropped 2.1%. This selloff was driven by investor concerns over escalating trade tensions and weakened economic fundamentals, as indicated by a weak US jobs report, suggesting a slowdown in hiring due to the impact of previous tariffs.
Across the Atlantic, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq all experienced similar declines. The Dow Jones fell 1.23%, the S&P 500 select lost 1.60%, and the Nasdaq closed with a drop of 2.24%.
European markets also felt the impact, with the Euro Stoxx50 index, which lists the largest European companies, falling by 2.9%. The IBEX 35, Spain's main market index, dropped by 1.88% to 14,126 points in the first session of August. Only five values managed to close in positive territory in the IBEX 35. Banco Santander led the retreats of the Spanish select, losing 4.52%. Other notable losses were seen in Repsol (2.33%), BBVA (1.95%), Inditex (1.86%), and Iberdrola (0.59%).
Despite these losses, some European markets have shown resilience or recovery since the tariff announcements earlier in the year. By late July 2025, they were near their highest levels for 2025, recovering losses caused by earlier tariff announcements. Investors are looking ahead to 2026, anticipating easing of tariff uncertainties and potential economic improvement.
The euro registered a strong increase of 1.42% in the foreign exchange market, recovering to 1.15 dollars. Oil prices also took a hit, with Brent, the European reference for oil, dropping 1.49%, to $70.49 per barrel, and West Texas Intermediate, the US reference for oil, losing 1.67%, to $68.09 per barrel.
Gold, acting as a safe-haven asset amid trade uncertainty, rose 1.79%, to $3,350 per ounce.
The outlook remains cautious with expectations that economic impacts of tariffs may delay and may slow global growth. However, investors are forward-looking toward potential easing of trade tensions in 2026.
- The significant drop in US stock markets on August 1, 2025, triggered by new tariffs, impacted the average returns for finance-related businesses, including investing in the stock-market.
- Despite the temporary effects of tariffs on European markets, investors are optimistic about potential easing of trade tensions in 2026, which could improve the overall economic fundamentals and influence average investment returns.
