Markets Rattled as Trump's Tariff Takes Effect, Tech Stocks Tumble

Global markets are reeling as President Donald Trump's new baseline global tariff of 10% comes into effect, sparking a fresh wave of uncertainty and volatility. The move, which was made possible after the Supreme Court struck down his earlier, sweeping levies, has been met with a sell-off in tech and payments shares, as well as a decline in Bitcoin's value.

According to Bloomberg News, the White House has confirmed that Trump can impose the tariff under the 1974 Trade Act without needing congressional approval. This has led to a surge in US Treasuries, as investors seek safe-haven assets amidst the escalating trade tensions.

The tech sector has been particularly hard hit, with software and payments shares tumbling sharply on Monday after Citrini Research published a report highlighting the potential risks that artificial intelligence could pose to various segments of the global economy. The report's findings have sparked concerns among investors, leading to a sharp decline in the value of shares in companies such as PayPal Holdings Inc.

PayPal, which has seen its stock slide by almost half in recent months, is now attracting takeover interest from potential buyers, according to people familiar with the matter. This development has added to the uncertainty surrounding the company's future, as investors weigh the potential risks and benefits of investing in the digital payments pioneer.

Meanwhile, Bitcoin's value has continued to decline, putting the token on course for its steepest monthly drop since the industry suffered a slew of corporate collapses in June 2022. The cryptocurrency's decline is seen as a symptom of the broader market volatility, as investors become increasingly risk-averse in the face of escalating trade tensions and economic uncertainty.

The impact of Trump's tariff on the global economy is still unclear, but it is likely to have far-reaching consequences for trade and commerce. As the situation continues to unfold, investors are advised to exercise caution and monitor developments closely.

In a sign of the growing uncertainty, Treasuries rose at the start of the week, as investors sought safe-haven assets amidst the escalating trade tensions. The yield on the 10-year Treasury note fell to its lowest level in weeks, as investors piled into government bonds.

As the markets continue to react to Trump's tariff, it remains to be seen how the situation will play out. One thing is certain, however: the escalating trade tensions and economic uncertainty are likely to have a profound impact on the global economy, and investors would do well to remain vigilant.