Wall Street fell sharply on Thursday (3), following a decline in global markets in response to President Donald Trump’s major round of tariffs on U.S. imports.
The S&P 500 dropped more than 4%, a huge daily decline for the index, echoing steep declines in Asia and Europe as investors reacted to the tariffs.
The financial market’s reaction suggests that the scale of the tariffs was a surprise. Investors did not expect such high tariffs.
The value of the U.S. dollar against a basket of other major currencies fell more than 2%, its worst day since late 2022.
Many large U.S. companies plummeted when trading began. Some of the hardest hit were technology stocks: Apple shares fell more than 8%, Amazon dropped 8%, and Nvidia shares fell about 5%. The tech-heavy Nasdaq Composite index fell more than 5%.
Consumer brand stocks also fell as Trump imposed high tariffs on countries that are manufacturing hubs for shoes and clothing, for example, a 46% tariff on products from Vietnam and 32% from Indonesia. Nike shares fell 12%.
Stock markets have been unstable in recent weeks as investors have been confused by the government’s messages regarding tariffs. Trump has announced, delayed, altered, and finally imposed tariffs on Canada, Mexico, steel, aluminum, cars, and auto parts.
The uncertainty surrounding tariff levels and how long they may last makes it difficult for investors, economists, and policymakers to assess the potential ramifications for consumers, businesses, and the economy as a whole.
The U.S. tariff on all imports is now around 22%, a significant increase from 2.5% in 2024, said Olu Sonola, head of U.S. economic research at Fitch Ratings. This rate was last revised around 1910, he said.
Source: The New York Times