Global financial markets fell sharply as trade tensions between the U.S. and Japan intensified, with President Donald Trump unexpectedly stepping into ongoing tariff negotiations. The S&P 500 dropped 2.2%, the Dow Jones slipped 1.7%, and the Nasdaq plunged over 3% amid growing investor uncertainty. Market losses were compounded by Federal Reserve Chair Jerome Powell’s cautionary comments on the economic toll of escalating tariffs, as well as a warning from Nvidia about the impact of export restrictions to China.
In Washington, President Trump joined Japanese Prime Minister Shigeru Ishiba and other top officials in a critical round of trade discussions. At the center of the talks were U.S. tariffs, including a sweeping 10% levy on imports and a 25% tariff on automobiles — measures that have hit Japan’s export-driven economy particularly hard. Japan has been pushing for exemptions, citing the potential damage to its industries and global supply chains.
Trump described the meeting as “very productive,” claiming “big progress” was made, though no concrete outcomes were revealed. Japanese officials, while open to dialogue, maintained a cautious stance and were careful to keep the discussions focused strictly on trade issues.
The president’s unexpected involvement initially rattled markets, but his optimistic tone later helped ease some investor concerns. Still, European markets continued to decline, and the U.S. dollar gained slightly against the yen and euro.
This latest development underscores the fragile state of global trade relations and their deep impact on financial stability. Investors remain on edge as they await tangible results from the negotiations and clearer direction from both governments on future trade policy.
