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Swiss index SMI set to drop again as tariff hikes continue

SMI expected to be deep red again - tariff escalation continues
SMI expected to be deep red again - tariff escalation continues Keystone-SDA

Tuesday’s recovery in global financial markets turned out to be just a brief fluctuation. As trading progressed, US stock markets reversed their gains and ended the day in the red.

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Broker IG is currently pricing Switzerland’s leading index 3.3% lower, mirroring the German DAX. The Swiss Market Index (SMI) might even dip below the 11,000 mark.

On Wall Street, the Dow Jones closed 0.8% lower on Tuesday, after gaining nearly 4% earlier in the day. The Nasdaq tech exchange saw a similar trend. One trader noted that the broader S&P 500 has shed $5.8 trillion (CHF4.9 trillion) in market capitalisation since what US President Donald Trump called “Liberation Day”. The Japanese Nikkei was also weak this morning, along with most other Asian stock markets.

+ US tariff shock: adding up the Swiss bill

Meanwhile, investors are once again seeking safe havens like the Swiss franc and gold. The franc, for instance, strengthened against the US dollar in early trading.

The second stage of Trump’s tariff package took effect on Wednesday morning at 6:01am (CEST). Countries with significant trade deficits with the US, according to government figures, now face even higher tariffs. China, which has implemented its own countermeasures, is particularly affected, with Chinese goods now subject to special tariffs totalling 104%.

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Switzerland now faces a 31% tariff. Media reports indicate that Trump has announced plans to impose tariffs on pharmaceutical products, which were initially exempt.

Behind the scenes, two of Trump’s key advisors, Elon Musk and Peter Navarro, recently had a heated confrontation. Musk sharply criticised Navarro, the chief architect behind the tariff strategy. Traders believe that pressure on Trump could mount from some US billionaires who have suffered significant losses due to the market slump.

Translated from German with DeepL/sp

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