Balcony above the trading floor inside the Euronext NV stock exchange on Monday, March 13, 2023 in Paris, France.
Nathan Lane | Bloomberg | Getty Images
U.S. exchange-traded funds that track global stocks nearly retreated in Wednesday trading as investors considered Donald Trump's victory to be detrimental to international stocks.
Closely track exchange-traded funds with iShares tracking South Korea, Hong Kong, Taiwan and Chile All were down in Wednesday trading. This is despite major US indexes rising to record highs.
The unusual backlash comes as traders prepare for President-elect Donald Trump's proposed import tax policy. He imposed tariffs of up to 20% on all goods imported into the United States, with an especially high 60% tariff on goods from China.
The policy was unpopular among voters, according to an NBC News poll. But that didn't seem to matter in the race, despite the broader economy being in recession. main problem For Americans heading to the polls.
“The investment environment in the US remains favorable, but international markets remain highly exposed to tariff policy,” said Yun Yu Ma, chief investment officer at BMO Wealth Management. “That uncertainty could limit near-term gains in global stocks.”
These moves reflect the disconnect between the U.S. and international markets as investors around the world process the U.S. election results.
on the other hand, Dow Jones Industrial Average European markets generally fell on Wednesday as President Trump's victory became clear, marking the best day in nearly two years. In the US market, iShares Core MSCI Europe ETF (IEUR) It fell more than 2%.
Asia-Pacific markets were more mixed, with Japan's Nikkei Stock Average bucking the downward trend. Still listed in the US iShares MSCI China ETF (MCHI) It fell more than 2% on Wednesday.
however, Global X MSCI Argentina ETF (ARGT) rose more than 2% to a new 52-week high, a rare bright spot among internationally focused funds. The South American country last year elected liberal Javier Millei, who was widely compared to Trump, as president.
The ICE US dollar index, which tracks the US dollar against a basket of international currencies, reached its highest level since July. Adam Turnquist, chief technical strategist at LPL Financial, said the dollar's rise was due to rising inflation expectations following President Trump's victory.
Turnquist said continued strength in the U.S. currency could have a negative impact on international stocks, especially emerging market stocks. These markets have underperformed the US market in recent years. surely, iShares MSCI Emerging Markets ETF (EEM) It fell more than 1% on Wednesday.
—CNBC's Sarah Min, Jesse Pound and Ha-Kyung Kim contributed to this report.
