U.S. markets slid Thursday in their steepest declines since 2020, as investors grappled with the threat that President Trump's new tariff plan will trigger global retaliation and hurt the economy.
Major stock indexes dropped as much as 6%. Stocks have lost roughly $3.1 trillion in market value Thursday, their largest decline since March 2020.
The Dow industrials dropped 1679 points, or 4%. The tech-heavy Nasdaq, which powered the market higher for years, was down 6%, pulled lower by big declines in Nvidia, Apple and Amazon.com. The S&P 500, which fell 4.8%, and the other benchmarks, suffered their sharpest declines since the early days of the Covid-19 pandemic.
The dollar meanwhile slipped to its lowest level of the year, a sign of unease over the growth outlook and fears that the flow of international funds into the country will be sharply curtailed. Inflation expectations rose.
Some of America's allies came out swinging after the details of the U.S. president's tariff plans were disclosed late Wednesday. French President Emmanuel Macron said Europe is weighing retaliation against U.S. tech firms, while Canadian Prime Minister Mark Carney said his country will match President Trump's auto tariffs with 25% tariffs of its own.
Dozens of household-name stocks posted double-digit declines, including HP, Nike and Target. Stellantis also fell sharply. The Jeep maker said it is temporarily halting production at its auto assembly factories in Mexico and Canada.
The turmoil has spread, with oil prices dropping more than 6% and investors selling gold after its sharp run over the past year to fresh records. But so far, traders said, selling has been orderly and though the scale of U.S. tariffs came as a shock, few investors are surprised to see stocks pull back following their gains over the past two years.
President Trump took the selloff in stride. "I think it's going very well," Trump said in response to a question about his tariffs Thursday afternoon. "The markets are going to boom."
Still, the decline sets up financial markets for one of their most precarious periods in recent years, as the tariffs and the international reaction test that faith of investors used to sticking with stocks.
In other developments:
--The U.S. dollar sank more than 1% against the euro, Japanese yen and Swiss franc. Oil and gold both fell and investors dashed for the safety of Treasurys, a response to fears that the tariffs will tip the economy toward recession.
--All U.S. imports will be subject to a 10% tariff, effective April 5.
--Trump will impose even higher rates on some nations that the White House considers bad actors on trade. For example, Japan faces a 24% duty and the European Union faces a 20% levy, effective April 9.
--China will be hit with a new 34% tariff, adding to previous duties, like the 20% tariff Trump imposed over fentanyl. That means the base tariff rate on Chinese imports will be 54%, before adding pre-existing levies.
--The tariffs are pegged to amounts Trump says other countries impose on the U.S. Here's the math behind the levies.
--Some global leaders are vowing to retaliate, while others are hopeful there is still time to strike a deal with the U.S.
--Canada and Mexico are excluded from the reciprocal tariff regime. They are still subject to plans to impose 25% tariffs on most imports to the U.S., though the administration has given an exemption for autos and many other goods.
--Trump's 25% tariffs on foreign-made autos and parts took effect at 12:01 a.m. ET.
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
April 03, 2025 16:23 ET (20:23 GMT)
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