President Donald Trump announced higher-than-expected tariffs on most of America’s trading partners, shocking investors and sending stock markets plummeting. The S&P 500 fell over 4% on Thursday, with Asian and European markets also experiencing sharp declines.
The new tariffs, including a 10% base line tariff on all imports, have sparked fears of an economic slowdown and weakened the US dollar. Investors are flocking to government debt as a safe haven, driving yields to their lowest since October.
Tech stocks took a hit, with Apple, Amazon, and Nvidia seeing significant drops. The Nasdaq Composite index fell over 5%, while smaller companies exposed to the economy saw nearly a 6% decline. The Russell 2000 index of small-cap companies slipped into a bear market, defined as a drop of 20% or more from its recent peak.
European markets were also affected, with shares in Puma and Adidas tumbling alongside Pandora’s stock. Asian markets suffered, with Toyota and Samsung Electronics seeing significant drops.
The uncertainty surrounding the tariff levels has made it difficult for investors to assess the potential ramifications for consumers, businesses, and the broader economy. The US tariff rate on all imports is now around 22%, from 2.5% in 2024.
With Thursday’s drop, the S&P 500 is back in correction, defined as a drop of 10% or more from its recent peak. Investors are warning that the Federal Reserve might need to cut interest rates more aggressively due to concerns over waning economic growth.
Source: https://www.nytimes.com/2025/04/02/business/trump-tariffs-global-stock-markets.html