American Express (AXP) shares plunged 6.88% in pre-market trading on Thursday, as investors reacted to President Donald Trump's announcement of sweeping tariffs on major trade partners. The move has ignited fears of a potential trade war and its impact on consumer spending, directly affecting credit card companies.
The tariffs, which target about 60 countries, are set to go into effect with base rates of 10% starting April 5, followed by higher reciprocal rates on April 9. This development has raised concerns about a slowdown in credit card spending due to a potential hit to consumer confidence as economies face pressure from tariffs and a looming global trade war.
American Express was not alone in its decline, as other major credit card companies also saw significant drops in their stock prices. Visa fell 2.9%, while Mastercard slipped 2.8% in pre-market trading. The broader market also reacted negatively to the news, with U.S. stock index futures plummeting on fears that the tariffs could push the global economy into a recession.
Analysts are closely watching how these tariffs might affect consumer behavior and spending patterns, which are crucial for the performance of credit card companies like American Express. As economic uncertainty grows, investors appear to be reevaluating their positions in financial services stocks, particularly those heavily reliant on consumer spending.
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