European stocks tumble, bonds rally after Trump proposes 50% EU tariff

[WSHazel]

Source: Yahoo Finance

European stocks tumbled, the euro gave back some gains, and euro zone government bond yields fell sharply on Friday after U.S. President Donald Trump said he is recommending a straight 50% tariff on goods from the European Union starting on June 1.

Trump's remarks in a series of social media posts, which also targeted Apple, halted investors' expectations that the bulk of tariffs he announced in early April would be negotiated away, a view that had supported stock market gains in the past few weeks.

Read more: https://finance.yahoo.com/news/european-stocks-tumble-bonds-rally-121842926.html

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This is transparent market manipulation. Stocks were drifting up over about 3 weeks, with dropping volatility, making the acquisition of Put Options and taking short positions less expensive. And then he tweets out this.

I am going to go out on a limb and say that Trump is going to announce postponing these tariffs in a week, and the market will go back up.

[NCDem47]

1. Who isn't on to his game at this point?

Nice way to to into holiday weekend.

Let me guess, he's already on the golf course.

[C_U_L8R]

2. The marmalade moron is flinging poo again

Just when things seems to calm a little, Trump needs to remind everyone that he'll fuck it up for you.

[bucolic_frolic]

3. One bond/income fund I watch changed their allocation to totally domestic a few weeks back

from global allocation. It's a fund of funds. So now if you want non-US you have to select a different one. Not sure how reducing global exposure helps existing shareholders, but they can't say they weren't informed.

[Bernardo de La Paz]

8. From January to May, Europe has been on a big bull run while US has zeroed out and dollar declined

Markets that are zero on Year To Date are actually negative when you factor in the dollar decline.

My guess is the dollar will continue to drift lower for a while, especially since tRump thinks it is a genius idea for increasing exports and reducing the value of US debt to foreign holders. However, it also increases the cost of imports above the cost of tariff taxes and by making debt less desirable it puts upward pressure on interest rates.

Another of my guesses is that there is much more downside risk in the stock market than upside potential and that the US stock markets are expensive relative to earnings and GDP. Further, they are top-heavy with the "Magnificent Seven" tech stocks and the effects of the wrecking ball approach of the regime will become more and more evident over time.

[bucolic_frolic]

10. That is all true.

Just about every fund has MAG7 stocks in the top % of holdings. Even mid-cap funds. And small cap funds own AI and MAG7 "feeder" companies. If MAG7 ever becomes the Nifty-Fifty, stocks will take a bath. You Tube, CNBC, investment gurus are all harping on valuation and risk. Get the timing right, or at least hedge it a bit, and one could be better off by more than a bit in the worst case scenario.

Domestically I only hold mid-cap growth and value funds, and very little of them, but I've also edged out. So I'm ok.

[Marthe48]

4. with tariffs to manipulate the markets who needs tax cuts?

n/t

[kkmarie]

5. I don't know much about the stock market

Will this be enough of a dip for marjorie three toes to buy?

[Bernardo de La Paz]

7. The first thing to know is that early in a move nobody knows how big a move it is.

Those who have a reasonable understanding of the financial markets know:

1) Nobody knows with any finality.

2) About the best one can do is make a good guess as to the general direction of short, intermediate, and long term trends.

3) The best thing to know is that even the smartest market wizards are constantly surprised by market events and so diversification and some defensive structuring of portfolios is a good idea.

[Bernardo de La Paz]

6. To call it manipulation is to give him too much credit. Can't say he is insane and a mastermind.

You can't claim he is deep in dementia and at the same time running a large financial scheme.

You can't claim he is less intelligent than the average college student and a financial genius at the same time.

You can't claim he is blundering his way wrecking the economy and is an economic manipulator at the same time.

He is much more like the first clause of those four statements than the second clause.

He is a little insane, somewhat demented, very stupid, and so out of it that he doesn't realize how much he is blundering.

[WSHazel]

9. This isn't mastermind level stuff

Trump and his cronies take short positions, then Trump says something that would be bad for stocks. Stocks fall. Then they take long positions and Trump says something that will be good for stocks. Stocks rise. Wash, rinse, repeat.

This is the simplest, stupidest, most transparent market manipulation scheme in history.

[Bernardo de La Paz]

11. Except those short & long positions are standard contrarian strategy INDEPENDENT of tRump. . . . nt

[WSHazel]

12. The difference is

Taking a long or short position is a bet on which way the market will move. Doing what Trump is doing is like betting on a 4 on a craps table and then putting a 3 and a 1 down on the table and claiming you rolled it. It is cheating the market, and other investors who are not "on the inside" will leave.

[LetMyPeopleVote]

13. Trump got pissed that Greenland signed a lucrative mineral deal with Greenland

Trump got pissed that Greenland signed a lucrative mineral deal with the European Union, so now he’s proposing a 50% tariff on all imports from the EU. 😡

— AnnieForTruth (@anniefortruth1.bsky.social) 2025-05-23T16:29:10.232Z