NEW YORK: US stocks plunged Thursday as traders reacted to Donald Trump's sweeping tariff announcement a day earlier, with the broad-based S&P 500 recording its biggest one-day decline since 2020.
At the closing bell, the Dow Jones Industrial Average was down 4.0 percent at 40,545.93, a loss of more than 1,600 points
The broad-based S&P 500 closed down 4.8 percent at 5,396.52 -- its worst trading day since June 2020. And the tech-rich Nasdaq Composite tanked 6.0 percent to 16,550.60, its largest one-day decline since the early days of the Covid-19 pandemic in March 2020.
“Obviously, the tariffs are higher and worse than people expected,“ Tom Cahill from Ventura Wealth Management told AFP.
“And it’s going to take some time to sort out exactly what the effects are going to be, not only on the economy, but also on company earnings,“ he added.
The pummeling in New York followed similar downcast days on European and Asian bourses.
Retailers such as Nike and Macy's that rely on imports from Asian countries targeted by Trump were hammered while tech giants Apple and Amazon both shed more than 8.9 percent.
“There are a lot of questions that still need to be answered, but I don’t think the market is overreacting,“ Cahill said.
The rout follows Trump’s “Liberation Day“ tariff announcement in which he unveiled a broad swath of new levies affecting all US trading partners.
Adam Sarhan of 50 Park Investments said the tariffs will reduce corporate earnings and could reignite inflation and prompt counter tariffs from US trade partners.
“Here you have a tremendous amount of uncertainty...and that’s why the market is heading for a bear market,“ said Sarhan, who also thinks a US recession is likely at this point.
“The market is a forward-looking mechanism,“ he said. “You typically have recessions after a bear market.”
