April 2 (UPI) — Stock futures tumbled Wednesday after President Donald Trump announced tariffs for all trading partners as investors fretted over increased prices and a possible recession.
At the close of the market at 4 p.m., stocks had broadly closed up on a belief the increases would not be that severe.
Shortly later, Trump announced the tariffs in the White House’s Rose Garden to supporters, including members of Congress and his Cabinet. He called it “Liberation Day.”
Nations will have a “baseline” of 10% with rates even higher for the “worst offenders,” according to the White House.
“The roller coaster ride continues as the initial leaks were positive … but then the details were released and they were far worse than expected,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, told CNN.
“The silver lining for investors could be that this is only a starting point for negotiations with other countries and ultimately tariff rates will come down across the board – but for now traders are shooting first and asking questions later.”
In all, the US tariff rate from just 2.5% last year to 22%, according to Fitch Ratings. It was 20% in 1930 after the Smoot-Hawley Tariff Act, which set off a global trade war that economists say made the Great Depression worse.
“This is a game changer, not only for the US economy but for the global economy,” Olu Sonola, head of US economic research at Fitch Ratings, wrote in a statement, predicting many nations will plunge into a recession.
Market data
Dow Jones Industrial futures immediately tumbled 256 points, or 0.61%. S&P 500 futures slid 1.69% and futures tied to the Nasdaq 100 fell 2.54%.
At 7 p.m., the DJIA was down 1,029.00, or 2.244% to 41,457.00, S&P dropped 203.00 to 5,508.50, or 3.57%, and Nasdaq slumped 879.75, or 4.45%, to 18,894.26.
At the close Wednesday, DJIA was up 235.36 to 42,225.32, S&P 37.90 higher to 5,670,97 and Nasdaq 151.15 greater to 17,601.05.
The records are DJIA of 45,014.04 on Dec. 4, which was about 8% higher than now; S&P 6,144.15 on Feb. 19, which was 10%; and Nasdaq 20,173.89 on Dec. 16 at 10%.
“If he would have come in with just the 10%, I think the markets would probably be up quite a bit right now,” Larry Tentarelli, chief technical strategist at the Blue Chip Trend Report, told CNBC. “But because the tariffs came in bigger than many expected, I think what that does is it creates more downside volatility right now.”
Multinational companies slumped, including Nike and Apple each sliding 7%.
Among other tech firms, Nvidia was off 4.5%, with Alphabet, Amazon and Meta dropping between 2.5% and 5%, Microsoft down nearly 2%.
West Texas Intermedia Crude for May dropped $1.96 to $69.75 a barrel, reflecting energy traders’ concerns fuel demand will decline.
And gold was trading at a record 3,194.50 at 6 p.m., as investors look to metals amid uncertainty about tariffs and the economy.
The baseline 10% tariff will go into effect at 12:01 a.m. EDT Saturday. It won’t apply was ones from Canada and Mexico that are compliant with the USMCA free trade agreement. Non-compliant goods will be charged a 25% rate.
“What was delivered was as haphazard as anything this administration has done to date, and the level of complication on top of the ultimate level of new tariffs is worse than had been feared and not yet priced into the market,” Art Hogan, chief market strategist at B. Riley Wealth Management, told CNBC.
Reciprocal rates
Bigger duties will be imposed on many countries. They include 20% on the European Union, 34% on China, 32% on Indonesia, 26% on India, 25% on South Korea, 24% on Malaysia, 24% on Japan. Britain was sparred at 10%, the same amount the kingdom charges the U.S.
“We will charge them approximately half of what they are and have been charging us,” said Trump in a press conference from the White House Rose Garden. “So, the tariffs will be not a full reciprocal.”
China, already subject to a 20% across-the-board tariff on goods, will have a 54% tariff.
Foreign-made cars hit hard
The United States will impose a 25% tariff on all foreign-made cars and light trucks effective at midnight Wednesday. These will include most parts made outside the United States.
As expected, auto companies’ after-hour prices slumped as consumers could see price hikes of $4,000 to $12,500 per car depending on the vehicle, according to a recent estimate by Anderson Economic Group, a consultancy that has worked for major automakers.
Auto dealers reported increased sales before the tariffs took effect.
Tesla, which makes most of its cars in the United States but imports parts, was down 7.98% to 282.76. Its record was 479.86 on Dec. 17 on the Nasdaq wit the company losing 41% of its price.
in after-hours prices, Ford was down 1.67%, General Motors 4.02% and Stellantis 1.52%.
Stellantis, the parent company of Chrysler and Dodge, also owns foreign brands like Jeep, Ram, Alfa Romeo, Fiat, and Maserati.
“U.S.-made cars with all U.S. parts is a fictional tale,” Dan Ives, the global head of technology research at Wedbush Securities, a financial services firm, told NBC News.
In 2024, 46% of the cars sold in the U.S. were imported,
Toyota, Hyundai and Nissan import more than 50% of their vehicles and General Motors imports about 49% with Ford at 10%, Bank of America research analyst John Murphy wrote in a note last week.
