The day after what President Trump dubbed “Liberation Day” has brought a swift and severe backlash in the financial markets, marking what some are calling a “Day of Reckoning” on Wall Street.
Equities took a nosedive on Thursday morning following the President’s sweeping announcement of new retaliatory tariffs, a move that has sparked fears of a full-blown global trade war with far-reaching consequences for the world economy.
As of 9:45 a.m. ET, the Dow Jones Industrial Average had dropped 1,162 points, a decline of 2.75%.
The S&P 500 sank by 3.4%, while the Nasdaq suffered an even deeper fall of 4.5%, reacting sharply to Trump’s rollout of a blanket 10% tariff on all imported goods, with even steeper penalties targeting dozens of countries, revealed after markets closed on Wednesday.
“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,” Mary Ann Bartels, chief investment strategist at Sanctuary Wealth, said in a note.
“We’re expecting rocky markets for the next few months, and through the end of the first half of the year,” she added.
Speaking on Fox News’ “Fox & Friends” Thursday morning, Vice President JD Vance acknowledged the immediate fallout but stood by the plan. He said he would not “shy away” from the hardships these tariffs might cause in the short term, emphasizing that the nation needed a “big change.”
Firms that depend heavily on Chinese manufacturing were hit particularly hard.
Apple, which relies on China for the bulk of its iPhone production, saw its shares slide by 7.5% after Trump slapped a hefty 34% tariff on Chinese goods, bringing the total levied on Beijing to 54% when factoring in earlier tariffs imposed this year.
While Apple has been attempting to shift some of its production to countries like Vietnam and India, that strategy may face roadblocks now that Trump has also imposed 46% and 26% tariffs on those nations, respectively.
Intel dropped 3.7%, and Qualcomm saw a 4.7% decline.
The sell-off extended across the tech sector, with Nvidia falling 5.9%, Tesla matching that drop, and Amazon sliding 7.2%.
Footwear giants such as Nike, Adidas, and Puma—many of which manufacture heavily in Vietnam—were not spared either. Nike took the hardest hit, its stock plunging 13.7% during early trading.
The tariff shock reverberated through currency markets as well, sending the US Dollar Index down 2.1%, while the euro surged by 2.4%, setting it on course for its largest single-day rise in nearly a decade.
Citi analysts quickly advised investors to go long on the euro, predicting the dollar could tumble to its lowest point since October 2021.
Trump’s 10% across-the-board tariff is roughly three times higher than the average rate before he took office in January. It is scheduled to take effect at 12:01 a.m. this Saturday.
Additional tariffs above the baseline 10% are set to roll out just after midnight on April 9, allowing a brief window for diplomatic negotiations to take place between the U.S. and other nations.
However, that delay may simply prolong market anxiety, as uncertainty over how talks will evolve continues to weigh heavily on investors.
“While we have made it past Liberation Day, there is still no clarity on tariffs, as President Trump has complete discretion on adjusting these tariffs and the ability to create carve outs as he sees fit,” David Bahnsen, chief investment officer at The Bahnsen Group, said in a note.
“For a stock market that was craving certainty, there is now even more ambiguity than before this announcement.”
{Matzav.com}