Markets around the world tumbled on Thursday after President Trump announced across-the-board tariffs on America’s main trading partners, including the European Union and Japan.
The S&P 500 plunged more than 3 percent at the open of trading, after Asian and European stock markets also fell steeply. The tech-heavy Nasdaq fell more than 4 percent.
The slide came after Mr. Trump announced on Wednesday a new 10 percent base line tariff on all imports as well as additional, country-specific taxes on goods from a host of other countries. Those included increasing total tariffs on Chinese imports to 54 percent, as well as 20 percent on goods coming from the European Union and 24 percent on Japanese imports.
The market reaction suggested that the scale of the tariffs on Wednesday had come as a surprise, and there was confusion about how the figures had been derived.
“The numbers are shockingly high compared to what people were expecting and it is inexplicable in many ways,” said Peter Tchir, head of macro strategy at Academy Securities. “I think it’s a disaster.”
The Trump administration had modified its estimates of the tariffs imposed on the United States to include adjustments for what it deemed currency manipulation or even other taxes, with analysts questioning the analytical basis for doing so.
“Trump is going to war with countries on this,” said Andrew Brenner, head of international fixed income at National Alliance Securities. “It’s ridiculous. It shows no comprehension as to what he is doing to other countries. And it is going to hurt the U.S.”
The value of the U.S. dollar against a basket of other major currencies dropped more than 2 percent, its worst day since late 2022.
Many major U.S. companies sank as trading began. Some of the worst hit were technology stocks: Shares in Apple were down more than 8 percent, Amazon was down more than 6 percent and shares in Nvidia dropped more than 5 percent.
Shares in consumer brands also slumped as the Trump administration imposed steep tariffs on countries that are manufacturing hubs for shoes and clothing, for example a 46 percent tariff on Vietnam and 32 percent on Indonesia. Nike’s shares dropped 13 percent.
In Europe, shares of Puma dropped about 12 percent and Adidas fell by more than 9 percent in Frankfurt. The stock of Pandora, a Danish jewelry company that makes its products in Thailand, tumbled 12 percent.
The Stoxx Europe 600 fell more than 2 percent on Thursday, with most sectors, including banks, technology and consumer goods, in the red. Shares in Maersk, the Danish shipping giant, fell 12 percent on fears of a global trade slowdown. Big European banks including HSBC, Commerzbank and Deutsche Bank dropped more than 4 percent.
In Asia, the stocks tumbled for a wide range of companies including technology and semiconductor giants, as well as major auto exporters. Shares of Japanese automaker Toyota fell more than 5 percent on Thursday, while South Korea’s Samsung Electronics fell close to 3 percent.
Investors flocked to government debt as a haven. The yield on the 10-year U.S. Treasury bond, which moves inversely to prices, fell to 4.03 percent, the lowest since October.
The prospect of weaker global economic growth also weighed on commodities. Oil prices slumped even further after the OPEC oil cartel and its allies accelerated plans to increase supply. Brent crude oil, the international benchmark, dropped more than 6 percent to around $70.20 a barrel.
Stock markets globally have been choppy in recent weeks, as investors have been whipsawed by the administration’s mixed messages on tariffs. Mr. Trump has previously announced, delayed, changed and ultimately imposed tariffs on Canada, Mexico, steel, aluminum, cars and auto parts.
The uncertainty around the tariff levels, and how long they might last, has made it difficult for investors, economists and policymakers to assess the potential ramifications for consumers, businesses and the broader economy.
The U.S. tariff rate on all imports is now around 22 percent, from 2.5 percent in 2024, said Olu Sonola, the head of U.S. economic research at Fitch Ratings. That rate was last seen around 1910, he said.
Through Wednesday, the S&P 500 had fallen 7.7 percent below its most recent peak in February. The Nasdaq Composite index, which is chock-full of the tech stocks, was down almost 13 percent since its peak in December.
Signs of worry have also been evident in the rapid rise in the price of gold. Investors have flocked to the precious metal, sending it 19 percent higher in the first three months of the year, its biggest quarterly rise since 1986. On Thursday, gold was trading at over $3,100 per troy ounce.
Although many investors worry about the inflationary effect of tariffs, falling bond yields and a declining U.S. dollar suggest that most are more worried about waning economic growth.
It has led investors to suggest that the Federal Reserve might need to cut interest rates more aggressively. Traders had been betting on three more quarter-point cuts this year, but the chances of a fourth have now increased, financial markets implied.
Some investors had hoped that the tariff announcement on Wednesday would cure some of the uncertainty in the financial markets. But few truly expected the news to be the end of Mr. Trump’s tariff talk and with it an end to the stock market volatility.
“Investors no longer see tariffs as a one-time event risk, but an always-present risk,” said Mandy Xu, head of derivatives market intelligence at Cboe Global Markets, adding that the current expectation in the market is for volatility to persist.
Joe Rennison writes about financial markets, a beat that ranges from chronicling the vagaries of the stock market to explaining the often-inscrutable trading decisions of Wall Street insiders. More about Joe Rennison
Danielle Kaye is a business reporter and a 2024 David Carr Fellow, a program for journalists early in their careers. More about Danielle Kaye
River Akira Davis covers Japan, including its economy and businesses, and is based in Tokyo. More about River Akira Davis
Eshe Nelson is a reporter based in London, covering economics and business news for The New York Times. More about Eshe Nelson
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