Stocks tumbled across global markets Thursday after President Trump’s sweeping new tariffs triggered fears of an escalating trade war and its wide-reaching consequences for the global economy. While the stock market doesn’t always move in lockstep with the broader economy, the sharp selloff reflected real anxiety among investors about rising consumer prices, slowed economic growth, and the growing possibility of a recession.
U.S. markets were hit especially hard, with major indices on track for their worst day in more than a year. By early afternoon, the S&P 500 had dropped 3.7%, the tech-heavy Nasdaq was down 4.8%, and the Russell 2000 which tracks smaller companies plunged 5.4%. At that point, the Russell officially entered “bear market” territory, having fallen more than 20% from its November highs.
The selloff wasn’t limited to the U.S. In Japan, the Nikkei closed down 2.8%, and Europe’s Stoxx 600 index dropped 2.4%. The market downturn was broad and deep, hitting nearly every sector.
Retail and tech stocks led the retreat. Dell, Ralph Lauren, Deckers Outdoor, Best Buy, Garmin, and Williams-Sonoma each saw their shares fall more than 14%. Even the so-called “Magnificent 7” tech giants, which had been market leaders for the past two years, suffered major losses Apple and Amazon both saw their shares sink by more than 7%.
According to data from FactSet, more than 400 stocks in the S&P 500 were in the red by midday.
Market analysts warned that investors are spooked not only by the size of the tariffs but by the lack of clarity around what comes next. Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in a note that markets are struggling with how quickly trade policy details are shifting and with what the final outcomes might be. He added that while the tariffs could eventually become a bargaining chip in broader negotiations, for now, markets are reacting on fear and uncertainty.
There had been hope among investors that Trump’s announcement would bring an end to the turbulence surrounding U.S. trade policy. Instead, it seems to have added to the confusion. David Bahnsen, chief investment officer of The Bahnsen Group, noted that the announcement left markets with even more ambiguity than before.
Although sharp drops in the stock market aren’t historically rare U.S. stocks have fallen by 3% or more in a single day several times in most years such volatility has been less common recently. The last time the S&P 500 saw this kind of steep one-day decline was in August 2024, and before that, September 2022.
With global markets rattled and investors scrambling for clarity, Trump’s aggressive tariff strategy is now raising serious questions about its long-term impact and whether the economic cost will outweigh any potential negotiating leverage.