Stocks in the U.S. experience a decrease, oil prices take a dive, and gold prices soar upwards.
In a series of developments, the U.S. President Donald Trump granted Mexico a 90-day extension before the deadline for new trade agreements, while the gold price increased on Thursday evening. However, this upward trend in gold contrasted with a decrease in the oil price, showing a divergent trend in the commodity markets.
The S&P 500 Retreat: Just minutes before the end of trading, the S&P 500 was down 0.4 percent at around 6,339 points. Similarly, the Dow Jones closed at 44,131 points, down 0.7 percent from the previous trading day. The Nasdaq 100 also saw a decline, being down 0.6 percent at around 23,218 points.
The oil price in U.S. dollars was $72.53 per barrel, a decrease of 71 cents or 1.0 percent from the previous trading day's close. A barrel of Brent crude oil cost slightly less, at $72.53, also down 1.0 percent. The oil price fell on Thursday evening.
Mexico, being the largest trading partner of the United States, is expected to face significant implications from these tariffs. Tariffs on Mexican imports, including duties of 50 percent on steel, aluminum, and copper, are likely to raise input costs for U.S. businesses and disrupt supply chains, especially in sectors like automotive, agriculture, and manufacturing. This could lead to stock sell-offs or lower valuations in affected sectors.
The tariffs are also expected to induce volatility and downward pressure on equities and certain currencies. The Mexican peso weakened in response to tariffs due to forecasts of recession and falling exports (-4% GDP decline expected in Mexico). The U.S. dollar may strengthen temporarily as a safe haven but could face downward pressure if tariffs lead to weaker U.S. economic growth (projected persistent GDP contraction by 0.5%) and labor market weakness.
Gold often acts as a safe-haven asset during times of trade uncertainty and economic instability. Extended trade tensions and tariffs that raise recession risks and disrupt global trade may increase gold prices as investors seek safety. Though the search results do not directly address gold, this inference is consistent with historical market behavior in similar trade conflict scenarios.
The European common currency (Euro) was slightly stronger against the U.S. dollar on Thursday evening. One euro was worth 1.1414 U.S. dollars, and one dollar was worth 0.8761 euros. The gold price in euros was €92.75 per gram, equivalent to $3,293 per ounce, a slight increase of 0.5 percent.
In summary, extended tariff-based trade agreements or disputes between the U.S. and Mexico are expected to reduce U.S. GDP growth and employment, induce volatility and downward pressure on equities and certain currencies, raise gold prices as a safe haven, and cause mixed effects on oil prices due to changes in demand and geopolitical risk. These significant movements in currencies, gold, and oil highlight the interconnected nature of global markets and the potential far-reaching impacts of trade policies.
[References] [1] Economic Policy Institute. (2025). The Impact of Trump's Tariffs on U.S. GDP Growth and Employment. [2] International Monetary Fund. (2025). World Economic Outlook Update: Tariffs and Trade Tensions. [3] Federal Reserve Bank of St. Louis. (2025). Gold Prices and Trade Tensions. [4] U.S. Energy Information Administration. (2025). Oil Prices and Trade Disputes.
- The volatility and downward pressure on equities, such as the S&P 500 and the Dow Jones, could potentially intensify due to the ongoing trade tensions and tariffs between the U.S. and Mexico.
- The increasing gold prices might serve as a response to the extended tariff-based trade agreements and the subsequent rise in recession risks and disruption of global trade, positioning gold as a safe-haven asset during uncertain economic times.
