U.S. markets slid Thursday in their steepest decline in more than two years, as investors grappled with the threat that President Trump's new tariff plan will trigger global retaliation and hurt economic growth.
Major stock indexes dropped as much as 5.5%. Stocks have lost roughly $2.7 trillion in market value Thursday, on track for their largest decline since March 2020. The Dow industrials dropped about 1400 points, or 3.3%. The tech-heavy Nasdaq, which powered the market higher for years, was down 5.5%, led by big declines in Nvidia, Apple and Amazon.com.
The dollar 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. French President Emmanuel Macron said Europe is weighing retaliation against U.S. tech firms, while Candadian 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.
Even so, the big decline sets up financial markets for one of their most eventful periods in recent years. Despite the 2025 retreat in major indexes, investors have remained generally sanguine this year about the prospects for global growth and the opportunities for U.S. markets. But the tariffs and the international reaction will test that faith.
Here's what to know:
--U.S. stock markets dropped sharply. The S&P 500 slid 4.1%, poised for its largest percentage decline since September 2022.
--The U.S. dollar sank more than 2% 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 14:38 ET (18:38 GMT)
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