Stocks Plunge as Trump Unveils Aggressive Tariffs, Markets React Strongly

NEW YORK, April 3, 2025 — U.S. stock markets suffered significant losses Thursday following the announcement of hefty tariffs by President Donald Trump, marking one of Wall Street’s worst days in years. The Dow Jones Industrial Average dropped 4%, losing 1,680 points, while the S&P 500 and Nasdaq plummeted 4.8% and 6%, respectively.

This downturn represents the largest point loss for the Dow since June 2020 and the steepest percentage declines for the S&P and Nasdaq since the early days of the COVID-19 pandemic. Excluding 2020, Thursday is the worst day for the S&P since 2011.

Trading commenced at 9:30 a.m. with the S&P starting down 3.1% and only deteriorating further. Trump’s announcement, which included a baseline tariff of at least 10% on all imports, left traders with little hope for a market rebound. Wall Street’s fear gauge, the CBOE Volatility Index (VIX), surged by over 35%, hitting its highest level since August.

“The markets are going to boom, the stock is going to boom, the country is going to boom,” Trump stated in an afternoon address, asserting that the reactions to his policies were optimistic.

The “magnificent seven” tech companies—Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia, and Tesla—were among the hardest hit, with shares of Apple and Amazon both falling 9%. Retailers, particularly those reliant on manufacturing in China and Vietnam, also faced severe downturns; shares of Best Buy and Target plummeted by over 11%.

According to FactSet, the most significant stock declines on Thursday were marked by Dell Technologies (-19%), Western Digital (-18%), and Best Buy (-18%). Apple alone is estimated to face $39.5 billion in additional costs due to tariffs, potentially impacting its earnings by 32%.

“This was the worst-case scenario for tariffs, and they were not priced into the markets, which is why we are seeing a risk-off reaction,” stated Mary Ann Bartels, chief investment strategist at Sanctuary Wealth.

Vice President JD Vance defended the tariffs during an appearance on Fox News, acknowledging short-term pain but emphasizing the necessity for significant change in U.S. trade policy. Economic analysts predict that these tariffs are likely to lead to higher inflation and stagnated economic growth, increasing fears of a looming recession.

In light of the market turmoil, U.S. government bonds gained popularity among investors seeking safety, with benchmark 10-year Treasury yields dipping below 4%—the lowest since before the presidential election.

French President Emmanuel Macron urged European corporations to reconsider investment plans in the U.S., reflecting growing transatlantic tensions over trade policies.

Mark Hackett, chief market strategist at Nationwide, remarked that Trump’s tariff announcement had a more significant impact than many anticipated. “The odds of a bear market are going higher,” he warned, as analysts adjusted their projections and expectations for continued volatility in the market.