US stocks suffered a sharp selloff on Thursday as President Donald Trump’s latest round of tariffs raised fears of a global trade war and economic slowdown.
The S&P 500 plunged more than 4%, marking its worst day since September 2022 and pushing it back into correction territory.
The Dow Jones Industrial Average lost 1,500 points, or 3.6%, while the Nasdaq Composite plummeted 5.5% as investors scrambled to assess the fallout of the new trade policies.
The tariffs, announced Wednesday, impose a baseline 10% levy on all imports, with significantly higher rates for key trading partners—54% for China, 20% for the European Union, and 46% for Vietnam.
Tech and retail stocks hit hardest- Apple, Nike stocks worst hit
Multinational corporations with significant exposure to imports bore the brunt of the market rout.
Apple, which manufactures most of its iPhones in China, slid 8.7%, while Amazon and Meta Platforms fell 8.8% and 8%, respectively.
HP Inc. suffered one of the steepest losses in the sector, plunging 16%.
Wedbush analyst Dan Ives said that tech stocks “will clearly be under major pressure on this announcement as the worries about demand destruction, supply chains, and especially the China/Taiwan piece of the tariffs.”
Retailers also faced sharp declines, as higher tariffs threatened profit margins and consumer spending.
Nike dropped 12%, while Dollar Tree and Five Below tumbled 8% and 29%, respectively.
Factories in Vietnam made about 50% of Nike footwear and 28% of its apparel products in the fiscal year 2024.
Lululemon Athletica and Deckers Outdoor, which rely heavily on Asian manufacturing, fell 13% and 17%.
Bank stocks were not spared, as fears of an economic slowdown and weaker lending conditions sent shares lower.
Bank of America slid 9.3%, JPMorgan Chase lost 6.5%, and Wells Fargo dropped 8%.
Semiconductor and EV stocks struggle despite White House assurances
Despite the White House clarifying that Taiwan would be exempt from the new tariffs on semiconductors, chipmakers still saw steep declines.
Nvidia fell 5.2%, Advanced Micro Devices lost 5%, and Qualcomm declined 6.7%.
Tesla, which had rallied on Wednesday after reports that CEO Elon Musk might step away from his government advisory role, reversed course and dropped 5.7%.
The electric vehicle maker has already been under pressure following a 13% decline in first-quarter deliveries, widely missing analyst expectations.
Market volatility spikes, analysts warn of slip to 5,200-5,400 range
The steep selloff has intensified concerns that the US economy is heading toward a recession.
The S&P 500’s drop pushed it back into correction territory, down more than 10% from its recent peak.
Investors are closely watching whether the index can hold the critical 5,500 level, with analysts warning of a potential further decline to the 5,200-5,400 range.
“The worst-case scenario for tariffs has materialized, and markets were not prepared for it,” said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth.
“This has triggered a sharp risk-off reaction, and we could see another 5-10% downside if support levels don’t hold.”
The CBOE Market Volatility Index (VIX), widely seen as Wall Street’s fear gauge, surged to 27, reflecting the heightened uncertainty gripping financial markets.
As the selloff deepens, investors will turn their attention to Friday’s US Nonfarm Payrolls report, which could offer further clues on the economic outlook and the Federal Reserve’s policy response.
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