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The stock market experienced a significant downturn on Thursday, with major indexes dropping sharply from the start and continuing to decline through the day’s close.
This massive sell-off was triggered by a press conference held by President Donald Trump late Wednesday, during which he introduced extensive tariffs targeting numerous U.S. trading partners.
According to Dann Ryan, managing partner at Sincerus Advisory, Trump presented a chart filled with varying tariff percentages ranging from 10% to 49%, further muddying the waters with a lack of clarity on the implications and any potential exemptions.
This ambiguity has led to an extended period of uncertainty in the markets as investors try to ascertain the full scope of the changes and any last-minute agreements. Consequently, this announcement did little to comfort investors who were already seeking reassurance amidst a volatile climate.
As for the numbers, the Dow Jones Industrial Average saw a decline of 4.0% closing at 40,545, while the S&P 500 decreased by 4.8% to 5,396, moving back into correction territory. The Nasdaq Composite fell 6.0%, settling at 16,550.
The day’s sell-off wiped out approximately $3.1 trillion in market value, marking the most significant single-day loss since March 2020, according to Dow Jones Market Data.
Apple Could Face Major Tariff Impacts
Some of the sharpest declines came from stocks that had previously been among Wall Street’s leading performers. Amazon.com (AMZN) dropped by 9.0%, and Meta Platforms (META) also fell by 9.0%.
Apple (AAPL) saw a decrease of 9.3%, with analyst Erik Woodring from Morgan Stanley indicating that the company is poorly positioned to manage the tariff hits.
Woodring highlighted that Apple’s reliance on extensive international manufacturing, particularly with most products sold in the U.S. produced in Southeast Asia, could result in an anticipated additional tariff expenditure exceeding $38 billion. This is projected to impact around 26% of their earnings before interest and taxes (EBIT) for the fiscal year 2026.
Nike Takes a Big Hit
While Apple’s drop was significant, it was Nike (NKE) that suffered the most among Dow stocks, plummeting 14.4% and marking a 26% decline year-to-date.
The sporting apparel giant recently revised its sales growth outlook down, pointing out that the new tariffs are contributing to an uncertain market environment. Nike’s connections with China have raised alarms about its future sales performance.
However, analyst Randal Konik from Jefferies remains somewhat optimistic, suggesting that Nike is strategically positioned to compete effectively on pricing over the long-term, allowing it to capture market share during this tumultuous period. He also noted that the stock price is approaching a bottom and management plans for a turnaround could bring future gains.
RH Sees Severe Decline After Earnings Announcement
In an even sharper decline, fellow consumer discretionary stock RH (RH) dropped 40.1%. The luxury home goods retailer shared disappointing fiscal fourth-quarter results and projected a full-year revenue increase of only 10% to 13%, falling short of the 15% expected by Wall Street, primarily result of tariff repercussions.
During the earnings call, RH’s CEO Gary Friedman expressed disbelief during the call when informed of the stock’s new price following the tariff announcement. “Oh sh*t,” he reacted. “I just looked at the screen. I hadn’t looked at it. You know, it got hit when I think the tariffs came out.” He emphasized that the company’s sourcing practices are well documented.
Indeed, filings reveal that RH sources an estimated 72% of its products from Asia. Following these events, RH shares have plunged 62% year-to-date, and it was previously part of Warren Buffett’s Berkshire Hathaway portfolio from Q3 2019 until Q1 2023.
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