Global markets are starting to feel the jitters of US President Donald Trump's tariff rhetoric. The cautious sentiment comes after trump said taxes on Mexican on Canadian imports will "go ahead". While the import tariffs were delayed by a month, the US President's threat comes ahead of Monday’s deadline and weighed on markets.

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US treasuries rose on flight-to-safety bets, while global stocks from Asia to Europe to wall street took a hit. Apart from tariffs, Trump is demanding US allies impose stricter restrictions on China’s semiconductor industry. He is also seeking to reduce Beijing’s investment in various American industries.

US economy is starting to look iffy

The growing rift between the United States and its allies over the situation in Ukraine is also contributing to the pessimism. At the same time, things are looking uncertain for the US economy.

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According to Michael Hartnett, a strategist at bank of America, "suspicion" is growing over the path of the S&P 500 due to the risks. Compared to last week's all-time high, the benchmark is down about 2.6 per cent. A drop of another 6 per cent, though, might prompt steps from the administration to counter the slide.

The magnificent seven stocks that contributed most to the S&P 500's rise in the past two years are off to a shaky start this year. After reaching a peak in December, the Bloomberg magnificent 7 index — which includes Apple, Nvidia, Microsoft, Alphabet, Amazon.com, Meta platforms, and Tesla — has declined nearly nine percent. The mega tech firms are indicating a trend towards correction territory.

The possibility of stricter chip limitations on China is causing semiconductor stock prices to tumble. Intel and Nvidia are down around 1.5 per cent, while ASML and ASMI are down 2 per cent or more in Europe. Japan's Tokyo electron has shown about 5 per cent losses.

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Joining the broader risk asset slide, bitcoin's price fell below 90,000 dollars for the first time in over a month. Crypto-exposed stocks have also been falling in line with the OG token's fall to its lowest level since mid-November. Bitcoin is down over 19,000 dollars from its peak of above 109,000 dollars on the day of trump's inauguration last month. MicroStrategy and Coinbase have lost over 5 per cent.

(With the inputs from the agencies)