Market Recap: Stocks Retreat as Investors Await Trump’s Tariff Announcement on April 1, 2025

Major Indexes Pull Back Amid Trade War Concerns

U.S. stock markets retreated on Tuesday, April 1, 2025, as investors anxiously awaited President Donald Trump’s highly anticipated “Liberation Day” announcement of sweeping new reciprocal tariffs scheduled for Wednesday. The uncertainty surrounding these potential trade policies has created significant market volatility in recent weeks and contributed to a challenging first quarter for investors.

As of market close on Tuesday, the S&P 500 dropped 0.33% to 5,593.18, the Dow Jones Industrial Average fell 0.65% to 41,730.61, and the tech-heavy Nasdaq Composite declined 0.20% to 17,265.27. This pullback follows a particularly difficult first quarter, where the S&P 500 slumped 4.6% and the Nasdaq plummeted 10.5% – marking their worst quarterly performances since 2022.

Trump’s Tariff Plans Create Market Uncertainty

The primary driver of current market volatility is the anticipated announcement of President Trump’s reciprocal tariff policy. According to reports, the White House is expected to unveil tariffs on goods from virtually all countries on Wednesday, April 2. Some sources suggest the administration is considering implementing tariffs of approximately 20% on most imports into the U.S., though no final decision has been confirmed.

“While the higher event risk baked in creates room for a potential relief rally in case of less aggressive tariffs, the risk arguably is still to the downside, with markets likely underpricing the trade risks,” noted Barclays assistant vice president Anshul Gupta in a Tuesday report.

Trump has already imposed tariffs on aluminum, steel, and automobiles, along with increased tariffs on goods from China. The uncertainty has prompted Goldman Sachs to raise its probability of a U.S. recession to 35% from 20% and cut its year-end target for the S&P 500 to 5,700.

Tech Giants and “Magnificent Seven” Under Pressure

The “Magnificent Seven” technology stocks that powered much of the market’s gains in recent years have been among the hardest hit in 2025’s market correction. Tesla (TSLA) has been particularly affected, down approximately 36% in the first quarter, though the stock showed signs of recovery on Tuesday, rising 1.61% to $263.32.

Nvidia (NVDA), the top performer among the Magnificent Seven over the past two years, is now the second-worst performer year-to-date, dropping 0.89% on Tuesday to $107.42. Despite its recent pullback, Nvidia trades at 26.4x forward earnings, well below its 10-year median of 45.1x, and still boasts the highest projected earnings growth in the group at 25.7% annually over the next three to five years.

Other notable tech movements included:
– Apple (AAPL): Down 1% as investors weighed tariff impacts on its global supply chain
– Alphabet (GOOGL): Declined more than 1% amid broader tech weakness
– Palantir Technologies (PLTR): Fell 0.56% to $83.93

Notable Stock Movers

Several individual stocks made significant moves on Tuesday:

– **Newsmax (NMAX)**: Shares surged 64.91% to $137.72, continuing a remarkable rally after its initial public offering on Monday when the stock soared 735%.

– **Johnson & Johnson (JNJ)**: Fell 5.27% to $157.10 after a U.S. judge rejected the company’s $10 billion proposal to resolve lawsuits linking baby powder and other talc products to ovarian cancer.

– **Lucid Group (LCID)**: Rose 5.83% to $2.56 after the company’s second product, the Gravity SUV, went on sale. Interim CEO Marc Winterhoff stated that the EV maker is providing customers with an alternative to Tesla.

– **PVH (PVH)**: Jumped 18.08% to $76.33 after the Calvin Klein and Tommy Hilfiger owner reported a sales outlook of “modest growth” that beat Wall Street’s expectations.

– **Tesla (TSLA)**: Despite its poor quarterly performance, Tesla shares rose 2.35% on Tuesday. However, short positions in the company have rebounded to 81 million shares, with bearish traders generating $10 billion year-to-date according to S3 Partners.

Upcoming Market Events

Investors should keep an eye on several key economic events in the coming days:

– **April 2**: ADP Non-Farm Employment Change and Crude Oil Inventories reports

– **April 3**: OPEC-JMMC Meetings, U.S. Unemployment Claims, and Final Services PMI

– **April 5**: U.S. Non-Farm Payrolls report for March

– **April 17**: European Central Bank Interest Rate Decision

Additionally, Tesla is set to report its first-quarter delivery numbers next week, with analysts forecasting an 8.5% year-on-year decline to approximately 377,000 vehicles.

Market Outlook

As markets enter the second quarter of 2025, investors remain cautious about the potential impact of Trump’s tariff policies on global trade and economic growth. The uncertainty has put stocks on a rollercoaster ride, with the S&P 500 touching a six-month low on Monday before recovering.

“Investors, more or less in this first quarter, threw their hands in the air, as you really cannot trade around this,” said Adam Turnquist, chief technical strategist for LPL Financial.

While the market correction has brought valuations down to more reasonable levels for many stocks, particularly among the tech giants, further pressure could emerge if economic conditions worsen and earnings expectations decline. Investors should remain vigilant about upcoming economic data, including ISM business activity surveys and the crucial non-farm payrolls report, as well as speeches from several Federal Reserve officials, including Chair Jerome Powell.

The market’s immediate future likely hinges on the details of Trump’s tariff announcement on Wednesday, with potential for either a relief rally if the measures are less severe than feared, or further declines if aggressive tariffs raise concerns about global economic growth and inflation.