The NASDAQ experienced a significant downturn as U.S. President Donald Trump announced an extension of the tariff pause to include goods from Canada and Mexico that adhere to the terms of the United States-Mexico-Canada Agreement (USMCA). While a previous tariff pause had boosted stock prices, this latest development led to a negative market reaction. All major U.S. benchmarks, including the Nasdaq Composite, entered correction territory, erasing the gains made post-election.

Investors reacted poorly to the Trump administration’s apparent commitment to tariffs despite the potential negative impacts. Trump’s dismissal of market concerns, particularly regarding the “Trump put” that was believed to safeguard against steep stock declines, contributed to investor unease. Additionally, U.S. Treasury Secretary Scott Bessent downplayed the significance of “cheap goods” in the American dream, emphasizing the administration’s focus on revenue generation, industry protection, and negotiation strategies through tariffs.

The tariff pause specifically applies to goods imported from Canada and Mexico that conform to the USMCA and will be in effect until April 2. This exemption covers a substantial portion of Canadian and Mexican imports, providing temporary relief from the 25% tariffs. Meanwhile, China experienced a slowdown in export growth, falling short of expectations and signaling challenges in the global trade landscape. The U.S. also established a Strategic Bitcoin Reserve through an executive order, funded by seized bitcoins from criminal cases.

Amidst these developments, U.S. markets faced volatility, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all recording significant losses. The Nasdaq’s entry into correction territory marked a notable shift from its previous highs. In Europe, the European Central Bank made interest rate cuts, reflecting a shift towards a less restrictive monetary policy. However, semiconductor stocks faced challenges, with an ETF tracking these companies displaying concerning patterns, hinting at potential future difficulties.

As global markets navigate uncertainties surrounding trade policies, investors are closely monitoring updates from the Trump administration. Bond markets experienced sell-offs in response to Trump’s tariff decisions and political shifts in Germany, leading to increased government borrowing costs worldwide. This dynamic environment underscores the interconnectedness of global economies and the impact of policy changes on financial markets.