S&P, Nasdaq post worst day since 2020.
Traders work on the floor of the New York Stock Exchange on Wall Street on Thursday in New York City. The Dow Jones Industrial Average opened down more than 1,000 points and kept falling, down 1,679 points at the close. Photo by John Angelillo/UPI | License Photo
U.S. markets plummeted Thursday after tariffs on 180 U.S. global trading partners went into effect on Wednesday afternoon.
The Dow Jones Industrial Average was down 1,679 points, or 4%, while the S&P 500 declined 4.8% and the Nasdaq Composite dropped 6%. Advertisement
The S&P lost nearly $2.4 trillion in value, its largest one-day drop in five years, according to Bloomberg.
The ICE U.S. Dollar Index declined 2.2% to 101.41 as of Thursday morning after having remained above 102 since Oct. 3.
“Despite exemptions for Mexico and Canada, the overall tariffs are worse than traders expected,” Justin Zacks, North America vice president of strategy at brokerage firm Moomoo, told MarketWatch.
“Stocks are trading lower in reaction to the news, with consumer stocks such as retailers, airlines, apparel makers and cruise lines down significantly, along with many of the large tech companies.”
Overall, it was the biggest trading day loss since early in the COVID-19 pandemic. Target, Lululemon, Nike and Tesla were among the hardest hit. Apple was one of the biggest tech stock losers.
Auto parts are expected to rise sharply as a result of 25% tariffs on foreign automobile production of cars sold in the United States. Stellantis, the company that operates Fiat and Chrysler, will stop production at plants in Mexico and Canada while the results of the tariffs shake out. Advertisement
At least 900 U.S. employees based in those countries would be temporarily laid off, CNBC reported. Its shares fell 9% Thursday.
The economic damage was across the board, increasing risks of an all-out global trade war amid fears the tariffs could plunge the U.S. economy into a recession.
“This was the worst-case scenario for tariffs and were not priced into the markets, which is why we are seeing such a risk-off reaction,” said Sanctuary Wealth chief investment strategist Mary Ann Bartles.
She added that the S&P 500 could see another 5-10% loss “which could likely point to a bottom of 5,200-5,400.”
The S&P began to correct late Thursday after Trump’s tariffs triggered a big stock sell-off.
During the 2024 presidential campaign, Democratic candidate Kamala Harris warned that Trump’s economic plan to use high tariffs would be a disaster for the economy.
In October 2024, nearly two dozen Nobel Prize in economics winners echoed her concerns. They said Trump tariffs would be inflationary and expand the federal deficit.
In an open letter those economists said the plan Harris advocated during the campaign would “result in a stronger economic performance, with economic growth that is more robust, more sustainable, and more equitable.” Advertisement
In March economists said tariffs and tariff retaliation by other countries would raise prices for U.S. consumers, cause job losses and slow business.
Market reaction Thursday underscored the economic damage economists predicted tariffs would cause.
The fallout caused by tariffs comes on top of DOGE-driven job losses near 2020 pandemic highs, according to Thursday report from Challenger, Gray & Christmas.
