New York, April 3, 2025 – U.S. stocks plunged at the open, with the blue-chip Dow losing more than 1,100 points and the broad S&P 500 tumbling nearly 200 points, after President Donald Trump unveiled his tariff plan after the markets closed on Wednesday.
Trump announced sweeping tariffs of at least 10% on all countries, effective April 5, and even higher levies for some countries.
Some of China’s neighbors and biggest trading partners such as Bangladesh, Vietnam, Laos and Cambodia were slapped with the highest tariffs. Some multinational companies have moved their supply chains to these countries as they looked to diversify away from China.
Shares of companies like Walmart, Target, Five Below, Gap, Dollar Tree and Amazon that import a bulk of their goods from Asia dropped.
Among big tech, Apple shares are getting hammered, down more than 8%, because of its large manufacturing base in China.
Semiconductor and pharmaceuticals were exempted in this round, economists noted.
Investors fear the tariffs will spark an all-out trade war.
Canada, China and the European Union warned they will retaliate with reciprocal tariffs.
Economists predict a trade war would push prices higher and slow the economy.
“For the median household, this would represent an annual income loss of $690, while for families in the bottom quintile the loss would surpass $1,000,” said Gregory Daco, EY chief economist.
“Importantly, we stress that a significant adverse financial market reaction would exacerbate these shocks and push the US economy into a recession.”
At 9:39 a.m. ET, the Dow plunged 2.66%, or 1122.78 points, to 41,102.54; the S&P 500 lost 3.19%, or 180.87 points to 5,490.10 and looks headed for its worst day in two years; and the tech-heavy Nasdaq dropped 4.15%, or 730.42 points, to 16,870.63.
The benchmark 10-year Treasury yield sank to 4.038%, the lowest level since October, and gold soared to another record high as investors fled to safer assets. Treasury yields move in the opposite direction of price.
Daco stressed that a lot of uncertainty remains, including the duration and potential exemptions and exclusions from these tariffs. “This uncertainty is likely to lead to a wait-and-see approach from businesses and feed market volatility,” he said.
Portfolio managers are calling for patience to see how the tariffs unfold and to remain invested for the long-term.
“Eye-watering tariffs on a country-by-country basis scream ‘negotiation tactic,’ which will keep markets on edge for the foreseeable future,” said Adam Hetts, portfolio manager and global head of multi-asset at Janus Henderson Investors.
“Fortunately, this means there’s substantial room for lower tariffs from here, albeit with a 10% baseline in place.”
Chris Zaccarelli, chief investment officer for Northlight Asset Management, said “the silver lining for investors could be that this is only a starting point for negotiations with other countries and ultimately tariff rates will come down across the board – but for now, traders are shooting first and asking questions later.”
With expectations of higher inflation and slower growth, the Federal Reserve is likely to continue its pause on interest rate cuts and shine a brighter spotlight on Friday’s key monthly jobs data, some experts said.
“The S&P 500’s rebound after a good ADP jobs report earlier (Wednesday) was a reminder that the broader economy is still the focus,” Hetts said.
“Nonfarm payrolls data will bear extra scrutiny, as any material weakness here will fan recession fears.”
According to FactSet, economists on average predict the U.S. economy added 125,000 jobs in March, lower than February’s 151,000 jobs. The unemployment rate is forecast to rise to 4.2% from 4.1%.
Corporate news
RH shares plunged 38.89% after the luxury home furnishings retailer issued a weaker-than-expected outlook and said it’s facing “the worst housing market in 50 years.”
It said in a release “we expect a higher risk business environment this year due to the uncertainty caused by tariffs.”
Cryptocurrency
Bitcoin is so far faring better than the stock market, but it isn’t immune to Trump’s tariffs.
Bitcoin mining in the U.S. has supply chain roots in Asia, which was hit hard by tariffs, Bloomberg reports.
Miners’ equipment deliveries have already seen delays, it said.
Shares of U.S. miners like Hut 8 fell. Hut 8 was last down 10%.
Shares of Bitcoin miners like Hut 8 fell.
Bitcoin was last up 0.12% at $82,513.14.
