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The Dow Jones Industrial Average plunged 1,473 points, or 3.5%, to 40,751, shortly after trade opened Thursday as spooked investors tried to assess the impact of the latest round of Trump administration tariffs.President Trump on Wednesday announced a 10% baseline tariff on all U.S. trading partners and increased levies on dozens of countries that charge higher taxes on American exports. Mr. Trump has said the goal is to make global commerce more fair, spur companies to expand in the U.S. and generate federal revenue. But experts warn that sharply ramping up tariffs on imports, coupled with any retaliatory measures from other nations, could drive up inflation, dampen spending by consumers and businesses, and hurt economic growth. The tech-heavy Nasdaq also cratered, dropping 847 points, or 4.8%, while the S&P 500 sank 3.9%. That amounts to a loss of roughly $1.8 trillion in morning trade, according to data from FactSet, which noted that the broad-based index is on track for its worst session since 2022,”Market uncertainty is likely to remain elevated in the weeks ahead, as investors consider likely downgrades to consensus U.S. economic and earnings growth forecasts, the risk of a tit-for-tat escalation in tariffs and the potential scope for tariffs announced to be negotiated down,” Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management, said in a note to investors.
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Overseas markets also slumped. In Asia, Tokyo’s Nikkei 225 index briefly dipped 4%, with automakers and banks taking big hits, before closing down 2.8%, while South Korea’s benchmark Kospi fell 1.1%. In midday trading in Europe, Germany’s DAX fell 2.4%, France’s CAC 40 in Paris lost 2.7% and Britain’s FTSE 100 shed 1.5%.
Appearing on CNN Thursday, White House Press Secretary Karoline Leavitt expressed confidence that the Trump administration’s economic policies would pay off. Commenting on global financial markets sliding overnight, she said, “To anyone on Wall Street this morning, I would say trust in President Trump.”Financial markets surged after Mr. Trump was re-elected in November, with Wall Street counting on lower taxes and deregulation to fuel corporate profits. Other investors bet on the Trump administration threatening tariffs mostly as a way to pressure other countries into making concessions on trade, rather than a full-fledged push to change the terms of global commerce.But after hitting all-time highs in February, stocks have turned tail as the White House makes clear it wasn’t bluffing. Indeed, investors have been left stunned by the speed and scale of Mr. Trump’s tariffs.
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In contrast to his first term, when he implemented levies on roughly $380 billion worth of goods over four years, Mr. Trump has imposed more than $3 trillion in tariffs in the less than three months since his return to power, according to the Economic Policy institute, a left-leaning think tank.
“Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” said Sean Sun, portfolio manager at Thornburg Investment management.Including its Thursday dive, the S&P 500 is now down 7.3% this year, the Dow has sunk 4.1% and the Nasdaq has tumbled 13%.
The Associated Press
contributed to this report.
Alain Sherter
Alain Sherter is a senior managing editor with CBS News. He covers business, economics, money and workplace issues for CBS MoneyWatch.
