April 3 (UPI) — U.S. markets plummeted upon opening Thursday after tariffs on 180 U.S. global trading partners went into effect on Wednesday afternoon.
The Dow Jones Industrial Average was down 1,552 points, or 3.68%, at 11 a.m. EDT, while the S&P 500 declined 4.45% and the Nasdaq Composite dropped 5.68%.
The ICE U.S. Dollar Index declined 2.2% to 101.41 as of Thursday morning after having remained above 102 since Oct. 3.
Approximately $1.7 trillion was lost at the beginning of trading Thursday from the S&P 500, according to Bloomberg, the worst drop in two years.
“Despite exemptions for Mexico and Canada, the overall tariffs are worse than traders expected,” Justin Zacks, North America vice president of strategy at brokerage firm Moomoo, told MarketWatch. “Stocks are trading lower in reaction to the news, with consumer stocks such as retailers, airlines, apparel makers and cruise lines down significantly, along with many of the large tech companies.”
The economic damage was across the board, increasing risks of an all-out global trade war amid fears the tariffs could plunge the U.S. economy into a recession.
“This was the worst-case scenario for tariffs and were not priced into the markets, which is why we are seeing such a risk-off reaction,” said Sanctuary Wealth chief investment strategist Mary Ann Bartles.
She added that the S&P 500 could see another 5-10% loss “which could likely point to a bottom of 5,200-5,400.”
The S&P was back in correction Thursday on the tariffs news with Trump’s tariffs triggering a big stock sell-off.
During the 2024 presidential campaign, Democratic candidate Kamala Harris warned that Trump’s economic plan to use high tariffs would be a disaster for the economy.
In October 2024, nearly two dozen Nobel Prize in economics winners echoed her concerns. They said Trump tariffs would be inflationary and expand the federal deficit.
In an open letter those economists said the plan Harris advocated during the campaign would “result in a stronger economic performance, with economic growth that is more robust, more sustainable, and more equitable.”
In March economists said tariffs and tariff retaliation by other countries would raise prices for U.S. consumers, cause job losses and slow business.
Market reaction Thursday underscored the economic damage economists predicted tariffs would cause.
The economic damage caused by tariffs comes on top of DOGE-driven job losses near 2020 pandemic highs, according to Thursday report from Challenger, Gray & Christmas.
