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The U.S. stock market opened with a significant decline on Friday, continuing a downward trend that began the day prior, largely influenced by President Trump’s latest announcement regarding extensive new tariffs on imports.
As of 9:34 a.m. EST, the S&P 500 index was down 144 points, approximately 2.5%, reaching 5,252. The Dow Jones Industrial Average experienced a steep decline of 1,006 points, also down 2.5%. The Nasdaq Composite index saw an even sharper drop, falling by 3.1%.
Thursday’s market downturn marked the largest one-day decrease since 2020, resulting in the loss of over $2 trillion in market capitalization within the S&P 500. Both the S&P 500 and the Dow dropped over 4%, while the tech-heavy Nasdaq witnessed a nearly 6% plunge, indicating widespread investor concern.
Although substantial market drops are not unprecedented, such significant declines are infrequent. According to Adam Turnquist, the chief technical strategist at LPL Financial, the S&P 500 has recorded 4% losses in a single day 38 times in the past 25 years.
International Markets Respond
Global markets mirrored the U.S. decline on Friday. In Asian markets, Japan’s Nikkei 225 index fell by 2.8%, and South Korea’s Kospi dropped 0.9%. European markets also faced losses, with Germany’s DAX decreasing by 2%, France’s CAC 40 falling by 1.6%, and Britain’s FTSE 100 shedding 1.7%.
Economic Growth Projections Adjusted
Amidst the tariff implementations, economists have revised their forecasts for U.S. economic growth downward. The escalating tariffs announced by President Trump are anticipated to increase inflation, which could dampen consumer spending—a critical component that contributes to over two-thirds of the country’s economic performance.
David Lefkowitz, head of U.S. equities at UBS Global Wealth Management, expressed the belief that, although tariffs may eventually decrease as negotiations proceed, this resolution will take considerable time. Consequently, UBS has revised its economic growth projection for the U.S. to under 1% for the year.
Businesses primarily absorb the costs associated with import taxes but often pass a portion of these expenses onto consumers. This could lead to higher prices for various goods, including electronics, household appliances, vehicles, clothing, and food items such as coffee and chocolate.
Furthermore, investors are on edge as the U.S. tariffs provoke retaliatory measures from significant trading partners. China announced on Friday that it will implement a 34% tariff on all U.S. imports beginning April 10. The Chinese Commerce Ministry also indicated the introduction of stricter regulations on rare earth exports, essential for technology like computer chips and electric vehicle batteries, and plans to impose trade sanctions on an additional 27 U.S. companies.
Analysts at Capital Economics noted that this strong retaliatory action makes it increasingly unlikely that a swift resolution to the trade tensions between the two major economies will emerge.
Job Growth vs. Market Performance
On a more positive note, U.S. employment figures revealed that employers added 228,000 jobs in March, significantly surpassing analyst expectations. However, the unemployment rate did experience a slight increase, rising to 4.2% from February’s 4.1%.
Despite the healthy job growth reported, these figures do not fully account for the ramifications of the recent tariff-driven trade policies implemented by the Trump administration. “For investors observing their portfolios, the stock market’s sharp decline felt akin to a procedure conducted without anesthesia,” remarked Brian Jacobsen, chief economist at Annex Wealth Management.
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