In the past days, global financial markets have swung wildly in response to on-again, off-again tariffs from US president Donald Trump. The gaming industry has not been free from these vacillations and moving forward, could be vulnerable.
Trump introduced sweeping tariff policies impacting US trade partners on April 2, infamously known as Liberation Day. These policies included a 10% baseline tariff on all imports and steeper, so-called reciprocal tariffs on lots of countries. Trump had announced tariffs impacting certain goods from Canada and Mexico in February, which kicked off the now-escalating trade war.
Global markets responded with a steep multi-day sell-off that wiped out trillions in value.
In back-to-back days to close the trading of the previous week, the S&P 500, Dow Jones Industrial Average and the Nasdaq Composite all fell by 5% or more. Conjointly, since the onset of the Covid pandemic in 2020, the past week was the worst for financial markets.
The sell-offs hit gaming companies across the industry hard. With the stock prices of Wynn Resorts, MGM Resorts, Caesars and others dropping in some cases by 10% or more, both regional and destination, retail casino operators, were especially vulnerable. Because of the suppliers’ dependence on supply chains and manufacturing, suppliers faced likely declines. Online-facing companies fared better, however, were still generally down 5% or 6%.
Yet, things changed when Trump suddenly recently reversed course and announced a 90-day pause on the reciprocal tariffs on Wednesday, which were due to come into effect that day. China was the only country not to see a reprieve. The country raised its rate to 145%, prompting Beijing to impose 84% tariffs on US goods.
The pause triggered a staggering resurgence. This resulted in one of the best single-day market performances in history. On Wednesday, all told, the Nasdaq soared 12% and the Dow and S&P climbed back 8% and 9.5%, respectively.
