US close: Markets hammered by Trump's tariff plan, S&P 500 falls 4.8%

3rd Apr 2025 22:01

(Sharecast News) - US stock markets suffered their worst sell-off in five years on Thursday after president Donald Trump unveiled a barrage of sweeping trade tariffs that were much more severe than expected.

Trump said the tariffs were a "historic executive order instituting reciprocal tariffs on countries throughout the world", with the White House revealing that it would slap a baseline tariff rate of 10% on all nations, effective 5 April.

Even bigger duties against countries that levy higher rates on the US - such as Japan, Europe, South Korea and Vietnam - are set to be put in place in coming days, according to the Trump administration.

"Some might argue that the sheer scale of the tariffs means that negotiations will be next, leading to a recovery in risk appetite, but comments from administration members seem to suggest that no talks are forthcoming yet. Markets, it seems, are on their own," said Chris Beauchamp, chief market analyst at IG.

The S&P 500 finished 4.8% lower at 5,396.52 - its biggest one-day loss since 2020 - while the Nasdaq plummeted 6.0% to 16,550.61, with both closing at their lowest levels since early August. The Dow sank 4.0% to 40,545.93, its lowest close since September.

The S&P 500 has now fallen 10% since Trump took office late last year, marking the worst 10-week start under a new president since George Bush came into power in 2001.

Companies with complex, international supply chains were bearing the brunt of the sell-off, as investors attempted to calculate how bad the impact of additional trade duties would be on bottom lines - particularly for stocks in the apparel and tech sectors.

"Not only do these companies have to consider the cost of importing, trying to rejig their supply chains and dealing with a homegrown consumer under pressure from rising prices, there's also the possibility of a global backlash against all things American," said Danni Hewson, head of financial analysis at AJ Bell. "That's before reciprocal tariffs are taken into account, something which is injecting another dose of uncertainty into an already febrile investor pool."

A sea of red

Apparel stocks were notable fallers, with huge losses registered for Nike, Lululemon, Under Armour, Gap, VF Corp and Ralph Lauren. Auto stocks were also falling heavily, including General Motors and Ford. Meanwhile, tech giants like Apple fell with the iPhone maker suffering its heaviest fall in five years (-9.3%).

One bright spot in the tech sector was Intel, which staged a late rally to finish higher on reports it has agreed to a chipmaking joint venture with TSMC.

The travel sector was also reeling from the news, with airlines and cruise companies falling sharply on the back of fears that a pick-up in inflation will hit consumer spending. American Airlines, JetBlue, Carnival, Norwegian, Southwest and United all tanked.

Even toy stocks weren't immune to the sell-off, with Mattel and Hasbro posting double-digit losses as investors fretted about the impact that tariffs would have on their overseas manufacturing operations.

Economic data (mostly) makes for grim reading

Economic data took a back seat on Thursday despite there being plenty to digest - and plenty to be concerned about.

Weekly initial jobless claims fell by 6,000 to 219,000 in the week ended 28 March, slightly below expectations of 225,000. However, continuing claims rose by 56,000 to 1.903m the week prior, hitting their highest level since November 2021.

The Institute for Supply Management's services sector purchasing managers' index retreated to 50.8 in March from 53.5 in February, well below the consensus forecast of 53.0, with staffing numbers falling sharply.

US employers announced 275,240 job cuts in March, according to Challenger, Gray & Christmas, the highest number since May 2020 and the third-highest monthly total ever recorded.

Finally, the US trade deficit fell more than expected in February, down from January's record high of $130.7bn to $122.7bn, compared with the market estimate of $123.5bn.

Dow Jones - Risers

Unitedhealth Group Inc. (UNH) $541.32 3.30%

Johnson & Johnson (JNJ) $159.82 2.87%

Intel Corp. (INTC) $22.43 2.82%

Coca-Cola Co. (KO) $73.18 2.59%

McDonald's Corp. (MCD) $318.27 2.15%

Verizon Communications Inc. (VZ) $45.62 1.97%

Procter & Gamble Co. (PG) $172.39 1.71%

Amgen Inc. (AMGN) $309.85 1.48%

Dow Jones - Fallers

Nike Inc. (NKE) $55.58 -14.44%

Boeing Co. (BA) $150.91 -10.47%

American Express Co. (AXP) $247.82 -9.97%

Dow Chemical Co. (DOW) $31.46 -9.83%

Walt Disney Co. (DIS) $88.84 -9.24%

Goldman Sachs Group Inc. (GS) $511.23 -9.21%

Caterpillar Inc. (CAT) $305.86 -8.64%

Apple Inc. (AAPL) $203.19 -8.25%

JP Morgan Chase & Co. (JPM) $228.69 -6.97%

Cisco Systems Inc. (CSCO) $57.31 -6.25%

S&P 500 - Risers

Lamb Weston Holdings, Inc. (LW) $59.51 10.01%

Centene Corp. (CNC) $64.29 5.86%

Elevance Health Inc. (ELV) $452.69 5.44%

Kroger Co. (KR) $70.67 5.16%

Sba Communications Corp. (SBAC) $230.87 4.81%

American Tower Corp (Reit) (AMT) $228.26 4.72%

Dollar General Corp (DG) $94.41 4.67%

Amer Water Works (AWK) $152.16 3.95%

Philip Morris International Inc. (PM) $162.10 3.78%

Cencora Inc (COR) $289.36 3.52%

S&P 500 - Fallers

VF Corp. (VFC) $11.68 -28.74%

Kohls Corp. (KSS) $6.64 -22.79%

Gap Inc. (GAP) $17.86 -20.29%

Under Armour Inc. Class A (UAA) $5.36 -18.79%

Under Armour, Inc. (UA) $5.15 -18.25%

Best Buy Co. Inc. (BBY) $62.22 -17.84%

Hanesbrands Inc. (HBI) $4.92 -17.31%

Celanese Corp. (CE) $47.15 -16.58%

Norwegian Cruise Line Holdings Ltd (NCLH) $16.31 -16.36%

Ralph Lauren Corp (RL) $198.34 -16.27%