Trade Tensions Escalate: Impact on Global Markets

The global financial markets experienced considerable fluctuations on Friday, with the announcement of new trade tariffs by U.S. President Donald Trump. Proposed 50% tariffs on European Union imports and potential 25% tariffs on non-U.S. made Apple iPhones sent shockwaves through the stock markets, resulting in a dip in major indexes.

The dollar index, which had already seen downturns throughout the week, dropped further, posting its biggest weekly decline since April. Concurrently, government bonds climbed due to safe-haven buying triggered by uncertainties over tax cuts and national debt levels.

Adding to the market instability, Moody's recent downgrade of the U.S. credit rating combined with Trump's tax cuts was projected to inflate federal debt significantly. Despite the market turbulence, commodities like gold and oil saw an upswing, with gold reaching new highs and oil prices rising ahead of the Memorial Day weekend.

(With inputs from agencies.)