Wall Street is no fan of Tariff Man.
The stock market stumbled Friday to its first losing month of 2019 in May, primarily due to President Donald Trump’s decision to broadly wield his tariff powers, first against China over trade and then against Mexico over immigration.
During stocks’ month-long slide investors wrestled with the potential impact that the U.S.’s escalating trade war with China could have on corporate and economic growth. Friday’s losses came after Trump announced plans via Twitter to impose tariffs on Mexico in a bid to compel the nation’s third-biggest trading partner to crack down on migrants attempting to enter the U.S.
The move shocked investors and spurred a broad sell-off that sliced more than 350 points from the Dow Jones Industrial Average. The selling left the benchmark S&P 500 index 6.6% lower for the month, and up 9.8% for the year so far.
“Clearly the markets were blindsided and completely caught off guard,” said Cliff Hodge, director of investments for Cornerstone Wealth.
It was only a month ago that the S&P 500 hit a record high and underlined its claim as the longest bull market for stocks on record, at more than a decade long. The market had climbed steadily through 2019 amid rising investor confidence that a deal with China was at hand and that the Federal Reserve would not tip the economy into recession by raising interest rates too aggressively.
But when the first weekend of May arrived, Trump’s tweet threatening more tariffs on China upended months of calm in the market. Investors are now preparing for a much longer and messier resolution to the global trade war than they were expecting just a few weeks ago.
The trade conflicts have also clouded the global economic outlook, with many economists now