Tonight, a sharp plunge!

【Introduction】Unexpectedly, there was still a surprise—U.S. stocks plummeted!

Brothers and sisters, as A-shares are about to open, U.S. stocks are plunging sharply tonight, with the Dow dropping about 700 points. It’s hard to tell if it’s intentional or not!

Let’s take a look at what happened.

U.S. Stocks Plunge

On the evening of February 23, the three major U.S. stock indices declined, with the Dow dropping over 700 points in a straight dive. The Nasdaq and S&P 500 both fell about 1%.

Due to new tariffs increasing market uncertainty about inflation prospects and global growth, gold prices surged. Spot gold rose about 2%, and spot silver increased about 3%.

These market fluctuations occurred after Trump announced last Saturday that global tariffs would be raised from 10% to 15%, effective immediately, although it’s unclear if official documents signing the effective date have been signed. He also mentioned that additional tariffs will be imposed in the coming months.

Following a Supreme Court ruling, Trump warned that countries attempting to “play tricks” would face higher tariffs.

European officials expressed concern over this move, warning that it could threaten trade agreements with the U.S… The EU Commission stated in a Saturday release that “the current situation is unfavorable for achieving ‘fair, balanced, and mutually beneficial’ transatlantic trade and investment,” and called for the U.S. government to provide “full transparency” regarding its next steps.

Wall Street just experienced a volatile trading session. Last Friday, after the Supreme Court overturned much of Trump’s trade agenda, stocks initially rebounded, then retreated, and finally rose again. Investors had hoped the court’s decision would ease tensions between the U.S. and its trading partners and possibly lead to refunds for companies affected by tariffs.

However, turbulence surrounding Trump’s global tariff policy may not end soon. The policy is invoked under Section 122 of the Trade Act of 1974, which allows the U.S. president to impose tariffs for up to 150 days before requiring congressional approval.

Analysts say, “The big question is what happens after this window closes. If tariffs continue down this path, we’re likely to see the Supreme Court again later this year. The tariff tug-of-war could become a recurring theme that disrupts markets for the rest of the year, although its volatility might be less than the initial shock in April last year.”

Technology stocks overall performed slightly weaker. OpenAI informed investors that it plans to invest about $600 billion in infrastructure by 2030, whereas previously the company had committed to investing over $1.4 trillion.

Novo Nordisk plunged over 15% due to its next-generation weight-loss drug CagriSema underperforming compared to Eli Lilly’s star drug in trials. Lilly’s stock rose nearly 4%.

Trump Threatens Again

On the evening of February 23, Trump threatened to impose higher tariffs on countries that “play tricks” on existing U.S. trade agreements.

He posted on social media: “Any country trying to exploit the ridiculous Supreme Court ruling to ‘play tricks,’ especially those that have been ‘extorting’ the U.S. for years or even decades, will face higher, worse tariffs than they recently agreed to. Buyer beware!!!”

This statement highlights his administration’s effort to maintain the integrity of trade agreements after the Supreme Court’s decision. Previously, the ruling weakened his ability to set tariff rates through emergency legal measures.

Trump’s post also indicates he is committed to unilaterally imposing broad tariffs on goods entering the U.S. However, his flexibility to act has diminished since the Supreme Court’s ruling.