New US tariffs on US trading partners around the world went into effect on Saturday, as part of his strategy to promote domestic investment by companies wishing to avoid import taxes.

U.S. stocks: $5.4 trillion loss

<Countries are considering how to respond to the latest tariffs imposed by Trump, which raised US tariffs to their highest level in more than a century, and the US president's announcement of a package of tariff adjustments sent the S&P 500 index of US stocks to an 11-month low, losing $5.4 trillion in market value in just two trading sessions by the end of the week. This is the steepest two-day drop since the coronavirus pandemic hit the U.S. in March 2020.

Global hedge funds lose $40 billion

As an immediate impact of the decisions, global hedge funds and leveraged ETFs have dumped more than $40 billion worth of stocks at a very rapid pace, with press reports stating that S&P 500 companies since the decisions were announced have lost more than $4 trillion in market value.

Global hedge funds and leveraged ETFs have dumped more than $40 billion worth of stocks at a very rapid pace. JPMorgan said in a note that "volatility-targeted portfolios had to sell between $25 billion and $30 billion worth of stocks to reduce risk," adding that “leveraged ETFs had to sell an additional $23 billion worth of stocks to rebalance at Friday's close, mostly in the technology sector.”

JPMorgan said in a note.

Effect of bank stocks

The S&P 500 Bank Index, which measures U.S. bank stocks, fell more than 7% on Friday, extending its declines, with Citigroup and Bank of America being the biggest losers in the index, both down more than 7.5TP3T.

JPMorgan Chase & Co (JPMorgan Chase) and Bank of America (BAC) were the biggest losers in the index, both down more than 7.5TP3T. <JPMorgan Chase, the largest US bank, lost 6.5 % while Goldman Sachs fell 7.1 1 % and Morgan Stanley 6.8 %. The selloff accelerated after China's Ministry of Finance said today that it will impose an additional 34 % tariffs on all U.S. goods from April 10 in response to Trump's move, and observers expected this response to cause volatility in European Union countries.

Observers expected this response to cause volatility in European Union countries.

Banks, indicators of economic activity, saw their shares fall as the U.S. departed from free trade policies built up over decades. Investors braced for a decline in consumer spending, loan demand and deal-making.