4:15pm: Bloodbath
US stock markets suffered as President Trump's newly announced "Liberation Day" tariffs, which impose a 10% baseline levy on all trading partners with higher rates for specific countries, fueled fears of global economic disruption.
By the close, the Dow Jones has tumbled 1,679 points (-4%) to 40,546, while the S&P 500 fell 274 points (-4.8%) to 5,397.
The Nasdaq suffered the steepest decline, plummeting 1,050 points (-6%) to 16,551, as technology stocks bore the brunt of the selloff.
Apple shares sank over 9%, and Nvidia, along with other chipmakers, faced sharp losses amid supply chain concerns.
The broader selloff also hit small-cap stocks, pushing the Russell 2000 into bear market territory.
3:40pm: Russell 2000 enters bear market
The Russell 2000 has officially entered a bear market, down more than 20% from its recent highs.
A stock index enters a bear market when it declines 20% or more from its recent peak, typically over a sustained period. This downturn is often accompanied by widespread pessimism, economic concerns, and declining investor confidence.
Nearing the closing bell, the index, considered a measure of small cap stocks, was down nearly 6.1% at nearly 1,919 points.
3:17pm: Stellantis suspends operations
Stellantis NV (NYSE:STLA, EPA:STLA) announced that it has temporarily suspended operations at its Windsor Assembly Plant in Ontario, Canada, for two weeks starting April 7 as a direct response to US president Donald Trump's newly imposed 25% tariffs on imported vehicles and auto parts.
Shares of the automaker dropped over 9% on the news.
Stellantis has stated that the shutdown is necessary to evaluate the impact of the tariffs on its operations.
Trump’s tariffs apply to all foreign-made cars entering the United States, significantly disrupting the deeply integrated North American automotive supply chain.
2:23pm: Oil slides
Oil prices plunged on Thursday, marking the steepest decline since 2023, as markets reacted to a combination of increased OPEC+ production and new U.S. tariffs that heightened concerns over global economic growth.
West Texas Intermediate (WTI) crude futures dropped as much as 7.3%, while Brent crude, the international benchmark, fell over 5% to approximately $70 per barrel.
The sharp decline followed an unexpected announcement from OPEC+—a coalition of oil-producing nations including Saudi Arabia and Russia—to accelerate their planned production increases. The group decided to raise output by 411,000 barrels per day (bpd) starting in May, a figure three times higher than initially scheduled.
“The combination of OPEC+ supply increases and weaker macro sentiment is leading to increased downside risk for crude oil prices,” UBS analysts said in a note to clients. “We now see WTI trading toward the lower end of the $55–$75 per barrel range.”
1:41pm: Nearly $2T wiped from markets
All major indices were still sharply lower amid concerns over President Trump’s sweeping tariffs.
By early afternoon, the Dow Jones was down 3%, the S&P 500 had fallen 3.8%, and the Nasdaq led the decline with a 4.9% drop, driven by steep losses in tech stocks.
Tech stocks are under heavy selling pressure, with Apple, Nvidia, Tesla, and Amazon all down around 6-7%. Retailers like Nike and Dollar Tree have tumbled 10% as tariff-driven cost increases threaten margins and consumer spending.
Overall, nearly $2 trillion in market value has been wiped out. Analysts warn of continued volatility, economic downgrades, and potential Federal Reserve intervention to counteract the fallout.
1:05pm: Canada announces reciprocal tariffs
Canada has announced a retaliatory 25% tariff on American-made vehicles and auto parts, effective immediately, in response to similar tariffs implemented by US president Donald Trump.
This week the US imposed a 25% tariff on all imported vehicles and parts, aiming to incentivize domestic manufacturing.
Canadian prime minister Mark Carney announced matching tariffs on Thursday.
12:33pm: Reciprocal tariffs could boost inflation
Deutsche Bank has warned that new "reciprocal" tariffs, as outlined by the Trump Administration, could significantly increase the US tariff rate, potentially reaching levels not seen since the 1930s.
The tariffs could push the overall rate from 2.5% to a range of 25-30% if sustained over time, the bank estimates.
While certain industries may be exempt, the overall impact is expected to weigh on the economy, with potential growth reductions of 1-1.5 percentage points this year. This could heighten recession risks and drive core PCE inflation higher, adding further pressure on the US economy.
11:55am: Services sector holding steady
The ISM services report indicates that while activity in the services sector is holding steady, firms are no longer hiring, orders are slowing, and backlogged orders are decreasing.
The services ISM index fell to 50.8, a nine-month low, signaling near stagnation.
Despite this, Wells Fargo believes business activity showed slight improvement.
Service providers, like manufacturers, are impacted by tariff uncertainty, which is pushing prices higher, though the prices paid metric for services slightly declined in March.
Wells Fargo noted that order volumes and backlogs fell in March, with the latter slipping into contraction territory. Tariff-induced price pressures could contribute to stagflation, analysts said, where higher costs lead businesses to cut expenses, including labor, resulting in both inflation and rising unemployment.
11:31am: S&P expected to take big hit
Jeff Buchbinder, Chief Equity Strategist for LPL Financial, warns that in a high tariff scenario, S&P 500 earnings per share (EPS) could be reduced by over 5%, with the 2025 consensus estimate for EPS likely dropping from $268 to below $260 unless significant bilateral negotiations occur.
Trump's tariff plan is expected to shift market sentiment from uncertainty to pessimism, with potential retaliation from countries like Europe and China possibly driving rates higher and further impacting markets. The next week will be crucial as the highest tariff rates take effect on April 9, Buchbinder noted.
"Stocks should stabilize once negotiations start to bear fruit and take rates down, assuming it's clear to markets that no meaningful tariff rates will be increased further because of retaliation," the analyst said.
"(If) recession odds rise as more job losses come, and rates don’t fall much because of tariff-driven increases in inflation expectations, even the most defensive, income-oriented areas of the equity market would be vulnerable."
11:21am: Canada and Mexico get pass
Canada has been exempted from a new round of U.S. tariffs under President Donald Trump's latest executive order, which also affects Mexico.
While no new tariffs have been imposed, a "fallback" clause could trigger new levies if justifications for previous tariffs are invalidated.
Goldman Sachs analysts noted that Canada and Mexico received better treatment than expected, with USMCA-compliant goods continuing to be exempt from the 25% tariff. However, if the exemption ends, these goods could face a 12% tariff, with exceptions for energy and potash.
10:55am: Risk of escalation
President Trump's "reciprocal" tariff policy would impose a weighted average tariff rate of 18.3%, according to Goldman Sachs, which is about three percentage points higher than the bank previously expected. However, around one-third of total imports would be exempt, reducing the effective impact to a 12.6 percentage point increase.
Including other tariffs announced earlier this year, the total increase in the US effective tariff rate is projected at 18.8 percentage points.
While Goldman Sachs expects negotiations to result in somewhat lower tariffs, the risk of escalation through retaliatory tariffs and additional sector-specific tariffs could lead to an even higher increase in the US effective tariff rate than the 15 percentage point rise currently assumed in their economic forecast.
10:15am: Markets drop
Stock markets plunged just after the open, with major indices experiencing steep declines in a broad-based sell-off.
The Dow Jones Industrial Average dropped 1,496 points (3.5%) to 40,729, reflecting investor concerns over the economic outlook.
The S&P 500 fell 218 points (3.9%) to 5,453, indicating widespread selling across sectors.
The Nasdaq saw the sharpest decline, plunging 834 points (4.7%) to 16,767, suggesting technology stocks are facing significant headwinds.
9.35am: GDP forecasts set to be cut
The dollar index, DXY, has undergone its biggest fall since 2022, down 2.1% to 101.64.
Against the pound, the greenback is down 1.3% to $1.3165, the weakest since October, while falling over 2% versus the euro and Japanese yen.
"The last 24 hours have seen an historic transformation to the global trading system, as President Trump’s reciprocal tariffs will likely leave the implied tariff rate at its highest in well over a hundred years," says Jim Reid, global head of macro research at Deutsche Bank.
"There are some credibility issues over how the calculations have been made and markets are already highlighting this," he said, pointing to the fall in the dollar.
He said the "most extraordinary outcome" of Trump's so-called 'liberation day' was that after two months of pronouncements where the impression was that there would be a forensic line-by-line calculation of reciprocal tariffs, "in the end the calculation has been derived by
a formula which can be very closely approximated by simply looking at the trade balance / imports, floored at 10%".
With the Dollar index seeing its largest fall in over two years, Reid said there is currently "a mini crisis of confidence in the US and its
policy making, which makes forecasting even more perilous than normal".
However, the bank has tried to provide its clients with an initial guide as to how its global forecasts will change in the coming days when economists and strategists publish their official revisions.
For the US, the initial forecast is that GDP growth could fall to around 1% in 2025, with core PCE inflation rising to 4%, recession risks up, and the Fed potentially cutting rates up to four times.
For the euro area, growth has been downgraded to 0.25-0.50% in 2025, near-stagnation, with inflation and ECB rate forecasts unchanged.
China's growth looks likely cut by 0.3 percentage points to 4.3% in 2025, with a targeted fiscal response expected, while Japan's faces a similar hit and the likelihood of Bank of Japan rate hikes diminishes.
8am: Wall Street stocks to tank in tariff announcement fallout
US shares are set to tank sharply after President Trump's 'reciprocal' tariffs announcement last night.
Dow Jones futures are down 2.8%, while those for the S&P 500 are pointing to a 3.4% plunge and the tech-heavy Nasdaq 100 is set to tumble 3.9% lower.
Wall Street closed higher yesterday, with the Nasdaq Composite up 0.9%, the S&P 0.7% and the Dow 0.6%, before Trump's White House speech came just after the close.
The President slapped a 10% blanked tariff around the world, with higher levies for some trading partners, including 20% import tax on all goods from the European Union, 24% on Japan, 34% on China and some, like Vietnam, even higher.
Reactions around the world saw stocks in Asia tank, including a 2.8% for Japan's Nikkei and 1.2% for the Hang Seng in Hong Kong, while in Europe the UK's FTSE 100 is currently down 1.4% and Germany's DAX 2.2% lower.
Crude oil has plunged 6% to $67.34 a barrel. Gold has even retreated from recent highs, down over 2% to $2,090 an ounce.
China has pushed back against the tariffs, warning it would restrict investments to the US to protect its interests but calling for "dialogue" with Washington.
The EU Commission said the US tariffs would be a "major blow" to the world economy, and it is "finalising the first package of countermeasures in response to tariffs on steel", while also "preparing for further countermeasures to protect our interests and our businesses if negotiations fail".
Goldman Sachs said tariffs on Canada and Mexico were not as harsh as is had forecast but most Asian trading partners "face a higher tariff than we expected".
Goldman said the weighted average tariff rate is 18.3%, with the effective increase is likely to be around 12.6 percentage points after exemptions, and that around a third of imports, or $1.1 trillion, are excluded from the new tariffs due to current or pending sectoral tariffs on products such as steel, aluminum, autos, semiconductors and pharma.
Bill Adams, chief economist for Comerica Bank in Dallas, said the tariffs amount to a roughly 25% tax increase on the $3.3 trillion of US annual goods imports, and if they stay as announced, will be partly absorbed by foreign sellers and American importers.
"But even so the increase will likely cause a 3% to 5% cumulative incremental increase in consumer prices above the trend rate of inflation over the next year."
Forecasts for the S&P 500 this year are also being significantly downgraded.
John Higgins, chief markets economist at Capital Economics, says his year-end prediction is being slashed for two key reasons.
"The first is yesterday’s announcement of greater tariffs on US imports than we had assumed. In such circumstances, we no longer think the economic backdrop will be sufficiently conducive to a rally in equities.
"The second is a recent shift in the AI narrative, which has shaken our conviction that big-tech will drive up the index."