NEW YORK — Wall Street tumbled on Thursday, marking one of its worst single-day losses in years as U.S. President Donald Trump’s newly imposed tariffs fueled investor concerns over a deepening trade war and potential global recession.
Major stock indexes fell sharply as investors pulled out of riskier assets in favor of government bonds. The sell-off followed Trump’s announcement of a 10% tariff on most U.S. imports, along with steeper duties on numerous countries, heightening uncertainty across financial markets.
The tariff measures, expected to disrupt global trade, signaled a dramatic shift from earlier optimism surrounding Trump’s pro-business policies, which previously pushed stocks to record highs. The new economic landscape prompted investors to sell off positions, fearing retaliatory moves from global trading partners.
China swiftly pledged countermeasures, while the European Union faces a 20% tariff. Other key trading partners, including South Korea, Mexico, and India, signaled a wait-and-see approach before the new tariffs take effect on April 9, as they seek potential concessions.
Market volatility surged, with the CBOE Volatility Index (.VIX), often referred to as Wall Street’s “fear gauge,” hitting a three-week high. Analysts predict ongoing instability as the economic impact of the tariffs unfolds.
“There are still more questions than answers,” said Steven DeSanctis, small and mid-cap strategist at Jefferies Financial Group.
Market Performance:
– The S&P 500 (.SPX) lost 275.05 points, or 4.85%, closing at 5,395.92.
– The Nasdaq Composite (.IXIC) fell 1,053.60 points, or 5.99%, to 16,547.45.
– The Dow Jones Industrial Average (.DJI) plunged 1,682.61 points, or 3.98%, to 40,542.71.
Technology stocks, which previously led Wall Street’s rally, were hit hard. Apple (AAPL.O) dropped following an aggregate 54% tariff on Chinese imports, affecting its supply chain. Nvidia (NVDA.O) and Amazon.com (AMZN.O) also recorded significant losses.
The stock market has declined significantly since the start of Trump’s presidency, with both the S&P 500 and Nasdaq falling 10% from recent record highs, signaling a market correction driven by tariff concerns.
Amidst the turmoil, investors increased bets on multiple interest rate cuts by the Federal Reserve. Traders are now pricing in four rate cuts this year, with the first likely in June.
“The Fed has substantial tools to stabilize the market,” said George Bory, chief investment strategist at Allspring Global Investments. He noted that the probability of a rate cut in June has increased, with some even anticipating a reduction as early as May.
The economic outlook now hinges on upcoming payroll data and a speech by Federal Reserve Chair Jerome Powell, both expected to provide critical insights into U.S. economic stability and future monetary policy direction.
Retail stocks faced steep declines, with Nike (NKE.N) and Ralph Lauren (RL.N) hit by new tariffs targeting production hubs in Vietnam, Indonesia, and China. Banking giants Citigroup (C.N), Bank of America (BAC.N), and JPMorgan Chase & Co (JPM.N) also slid as economic uncertainty deepened.
The small-cap Russell 2000 index (.RUT) plunged, reflecting broader concerns over domestic economic health.
“Small-cap firms supply major corporations, so tariff pressures on big businesses inevitably impact their smaller suppliers,” DeSanctis added.
Energy stocks were not spared, as Exxon Mobil (XOM.N) and Chevron (CVX.N) declined amid a 6.8% slump in crude prices. The drop was exacerbated by OPEC+ accelerating production increases.
Consumer staples emerged as a rare bright spot, with the traditionally defensive sector benefiting from gains in Lamb Weston (LW.N), which reported strong earnings.
As markets brace for further uncertainty, investors remain on edge over global trade tensions and potential Federal Reserve interventions aimed at stabilizing the economy.
