President Trump is back in the headlines. His plan to impose tariffs on China worth up to $50 billion across more than 100 goods, primarily those in the technology sector, citing intellectual property rights violations, increases uncertainty about a potential trade war affecting global markets. This will be the first time the president has directly attacked China, so we expect this announcement to significantly increase stock market volatility as investor anxiety grows and their demand for safe haven assets increases.
Additionally, markets will react to the Senate votes on the budget bill. If it is not passed in the coming hours, the government could face another shutdown tomorrow night, which would be the third of the year. For now, markets do not appear to be discounting the severity of the situation; however, it will be an important fundamental factor that will help deepen the nervousness in global markets and global volatility throughout the day. The bill presented this morning has been criticized by several Republican and Democratic members of Congress, so its passage is not yet assured.
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