US stocks took a nosedive on Thursday as investors reacted sharply to President Trump’s latest sweeping tariff announcement, stoking fears of a full-scale trade war and its potential repercussions on the economy.
US stocks sink at the open
The S&P 500 plunged 3.2%, marking its worst single-day drop since 2022, while the Nasdaq tumbled 4.1%, dragged down by a steep selloff in technology stocks. The Dow Jones also plummeted by about 1,060 points, reflecting widespread concerns across sectors.
On Wednesday, Trump unveiled a new baseline 10% tariff on all imports, set to take effect on April 5, while around 60 countries, including key U.S. trading partners, face even steeper levies. China, the European Union, and Vietnam were hit hardest, with duties of 54%, 20%, and 46%, respectively. Both China and the EU swiftly pledged retaliatory measures, raising the risk of a prolonged economic standoff that could slow global growth, exacerbate inflationary pressures, and push the U.S. closer to recession.
Market sectors reacted sharply
Market sectors reacted sharply to the news, with consumer discretionary, technology, and energy stocks suffering the biggest losses. Consumer staples and utilities, often seen as defensive plays, managed to stay in positive territory.
Companies with global supply chains and heavy reliance on imports bore the brunt of the selloff, with Apple plunging 7.8% and Nike tumbling 10%, as investors feared higher costs and potential supply chain disruptions. Megacap stocks also suffered heavy losses, with Microsoft dropping 2.7%, Nvidia sliding 5.4%, Amazon tumbling 6.7%, Meta shedding 6.6%, Alphabet falling 3.6%, and Tesla slipping 3.5%.
Adding to the turmoil, Treasury yields spiked as investors reassessed inflation risks, while the dollar strengthened on safe-haven demand. Analysts warned that further market volatility is likely, with traders now looking ahead to key economic data and potential Federal Reserve commentary on how policymakers may respond to the growing risks.
