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The tariff announcement sent stocks into their worst tailspin of 2025 so far and dragged the US dollar to a six-month low on Thursday, April 3. Trump unveiled the sweeping 10% tariffs on all imports and far steeper rates for key trade partners on Wednesday, April 2.
By 11 a.m., the Dow Jones Industrial Average had plunged about 1,590 points, down 3.77%. The S&P 500 fell 4.35% – or about 247 points – while the Nasdaq tumbled 5.55%, losing nearly 977 points.
The selloff deepened fears of a broad economic slowdown already fueled by increasing job losses, rising inflation concerns, and collapsing consumer confidence. The US dollar slid against many major currencies, including the euro, Japan's yen, the UK's pound, China's yuan, Mexico's peso, Switzerland's franc, and the Canadian dollar.
The ICE US Dollar Index fell 2.2% to 101.41, its lowest level since early October 2024, CNBC reported. That marked a sharp reversal from January, when the index briefly topped 110.
About an hour before Wall Street's opening bell, Trump prematurely declared victory in his trade war.
"THE OPERATION IS OVER!" Trump posted on his social media platform, Truth Social. "THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!!!"
Markets had anticipated tariffs, but investors were blindsided by the scale of them.
The White House said China's effective rate now stands at 54%, combining a new 34% tariff with the prior 20% duty. Many had expected a cap between 10% and 20%.
Retailers and multinationals have suffered heavy losses. Five Below's stock collapsed by 29%, Gap fell by 22%, Nike sank by 12%, Apple dropped by 8%, and Dollar Tree slid by 8%. Nvidia and Tesla each lost about 6%.
Small US companies were hit hardest, the Associated Press reported. The Russell 2000, which tracks about 2,000 of the country's smallest publicly traded companies, dropped more than 5%, officially entering a bear market.
UBS analysts warned the tariffs could knock US growth down by two percentage points and raise inflation to near 5%. Mary Ann Bartels, chief investment officer at financial advisor firm Sanctuary Wealth, told the AP that Trump's rollout is "the worst case scenario for tariffs."
The economic pain has been building in Trump's first three months back in the White House.
Challenger, Gray & Christmas said that US employers announced 275,240 job cuts in March. That's the third-highest monthly amount since the outplacing firm began tracking layoffs in 1989, only surpassed by the height of the COVID-19 pandemic in April and May of 2020.
Many of the layoffs were linked to billionaire Elon Musk's effort to purge federal agencies as de facto head of the Department of Government Efficiency. Retailers, automakers, and tech companies have also slashed tens of thousands of jobs.
Hiring is barely keeping up, according to Challenger. Employers announced just 13,198 new jobs in March and posted the worst first-quarter total since 2012.
In anticipation of the "liberation day" tariffs, Goldman Sachs elevated its recession odds to 35%, a dramatic increase from the bank's initial March prediction.
"The upgrade from our previous 20% estimate reflects our lower growth baseline, the sharp recent deterioration in household and business confidence, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies," Goldman Sachs said in its report.
The Conference Board said consumer confidence is at its lowest point in 12 years, while a University of Michigan survey found that two-thirds of Americans expect unemployment to rise in 2025. Analysts say Trump's tariff escalation could accelerate that trend.
Homebuilders have warned that all of Trump's tariffs could increase the price of a new home by up to $10,000.
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