Uncertainty of Stock Market Returns Due to Tariff Announcements

Abstract

Based on this thesis, the way global tariff announcements are transmitted to the equity market of Kazakhstan is discussed. It runs an event-study design on 15 of the most liquid KASE-listed stocks and the KASE index based on daily data between January 2022 and October 2025, which includes 10 dates of 2025 tariff-related news, including five negative (tariff introduction or escalation) and five positive (pauses, delays, or reduction) events. Constant-mean model estimates expected returns over a 120-day pre-event window, eliminates overlapping event periods, and uses pooled event-time regressions and cumulative average abnormal returns (CAARs) over symmetric windows from [−1,+1] to [−5,+5]. The findings indicate that there are statistically and economically significant negative equity shifts in Kazakhstan companies associated with negative tariff announcements, when measured over multi-day horizons, and the CAARs of negative tariff announcements are both negative in individual stock returns and the KASE index, with approximately abnormal returns of 2-3 percent over one-week horizons. In comparison, positive news regarding tariffs does not create any strong abnormal or cumulative abnormal returns. A placebo experiment, in which the calendar dates in 2024 are employed, provides CAARs near zero, which makes it possible to interpret the 2025 results causally. The results suggest that the tariff escalations are a significant downside risk to investors in Kazakhstan, and the positive changes in tariffs are being discounted or expected. To policymakers, the work points to the fact that trade-policy shocks may spread to the peripheral markets and influence local financial conditions even though the country may not be a direct participant in the dispute.