U.S. stocks tumble after Trump imposes sweeping tariffs
U.S. stocks dropped in after-hours trading following President Trump's announcement of new tariffs, including a 10% baseline rate, raising concerns about a potential global trade war.
On April 2, 2025, U.S. stocks saw a significant drop in after-hours trading as President Donald Trump unveiled a new round of sweeping tariffs. The announcement, which included a baseline tariff of 10% on all countries, set off fears of a global trade war that could negatively impact the U.S. economy.
The S&P 500 ETF dropped by 2.9%, while the Nasdaq's Invesco QQQ ETF shed 3.5%. Shares of multinational companies such as Nike and Apple plunged, reflecting the broader market concern.
Trump's tariff announcement stuns markets
The market's initial reaction was negative, and many important stock indices experienced sharp declines in after-hours trading. Some of them were:
- The SPDR S&P 500 ETF Trust (SPY) lost 2.9%
- The Invesco QQQ ETF dropped 3.5%
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) fell by 1.4%
Shares of companies that rely on global trade, such as Nike and Apple, suffered important losses; while companies which sell imported goods, like Five Below and Gap, were not faring much better.
Trump's higher tariffs may lead to increased inflation
These new tariffs come amid an already volatile market which is experiencing uncertainty since late February. And while many had hoped that tariffs were not going to exceed 10%, Trump's tariffs could soar to 54% for countries like China.
This percentage is, accounting for both new reciprocal tariffs and previous levies. However, the uncertainty is not inspiring a very trusting space for investors, raising fears of future economic concerns.