Trump's tariffs send US stocks into a spiral, Dow Jones down by 1,600 points
Shares dipped through financial markets across the world over, as anxiety mounted over the destruction Trump's global tariffs could wreak on economies worldwide
Donald Trump’s reciprocal tariffs send US markets into shock on Thursday (April 3), an impact not seen since the Covid-19 pandemic. Dow Jones, the stock market index of 30 prominent companies listed on stock exchanges in the United States, is also down by over 1,600 points.
Shares dipped through financial markets across the world over, as anxiety mounted over the destruction President Donald Trump's sweeping global tariffs could wreak on economies worldwide, including America's own.
The Dow Jones Industrial Average dropped a massive 1,679 points (or 4 per cent) and the Nasdaq composite sank 6 per cent.
The S&P 500 slid down 4.8 per cent, which was more than in major European and Asian markets. It was its worst day since the pandemic market crash in 2020.
Most, including Wall Street feared economic growth slowing down and increasing inflation.
Stocks of big tech firm to crude oil dropped to the very value of the US dollar against other currencies. Even gold, which saw an uptick in its trend amid investors seeking safer in-hand options, saw a sinking range on Thursday, The Associated Press reported.
Reports said that smaller US companies suffered the worst blows, with the Russell 2000 index of smaller stocks dropping 6.6 per cent to pull more than 20 per cent below its record.
Worst case scenario
Many analysts felt the US president managed to surprise the markets with "the worst case scenario for tariffs".
According to UBS, it is "plausible" the tariffs could knock down the US economic growth by 2 percentage points this year raising inflation to 5 per cent.
Earlier, Trump had brushed aside any impact on the economy and markets saying that tariffs could cause a "little disturbance". But as the markets plunged, Trump on Thursday downplayed the development saying the 'markets are going to boom, the stock is going to boom and the country is going to boom. He made this statement while leaving the the White House to fly to Florida after unveiling his 'kinder' tariffs to the world.
Many also fear that Trump’s tariffs, which earlier was assumed to bring other nations to the negotiating table now may be some kind of "ideological goal" for the President. Bringing back manufacturing jobs also seems a bit of a distant goal.
If Trump goes ahead with these tariffs, then stock prices is expected to drop much more, to reflect that a recession could happen.
In the wee hours of Friday, S&P 500 was down 11.8 per cent from its record set in February.