World events and their impact on stock values

This thesis examines the differential impacts of Donald Trump’s protectionist trade policy on sectoral ETFs in the US equity market during the period from May 2024 to March 2025. The study employs an event study methodology, extended by panel regressions with fixed effects, quantile regression, and ANOVA statistical tests to analyze 15 key events related to trade policy, including tariff announcements, their implementation, import investigations, and the granting of exemptions. The research tests three hypotheses concerning asymmetric effects based on sectors’ positions in global value chains, differences between reactions to tariff announcements versus implementations, and the persistence of negative effects over time. The results clearly demonstrate systematic differences in market reactions depending on sector characteristics. The infrastructure sector (PAVE: -8.10%) and semiconductors (SOXX: -4.95%) experienced the most significant negative abnormal returns, while consumer staples (XLP: +1.97%) and the defense industry (ITA: +1.83%) responded positively. Tariff implementations generally triggered stronger market reactions than announcements, with negative effects in import-dependent sectors persisting longer and deepening more markedly than the positive effects observed in protected sectors. The analysis of abnormal trading volumes revealed the highest activity in consumer staples (XLP: +58.93%) and semiconductors (SOXX: +49.00%). The findings provide empirical evidence of pronounced heterogeneity in the impacts of protectionist measures across the US economy and have important implications for investment decision-making as well as economic policy formulation during periods of trade conflict.