Market Recap: Wall Street Plunges as Trump’s Tariffs Trigger Global Selloff – April 4, 2025
Major Indexes Suffer Worst Day Since 2020 as Trade War Fears Intensify
The U.S. stock market experienced a dramatic selloff on Friday, April 4, 2025, as investors reacted to President Donald Trump’s sweeping new “Liberation Day” tariffs and China’s retaliatory measures. Major indexes recorded their worst single-day performance since the early days of the COVID-19 pandemic in 2020, with fears of a potential recession gripping Wall Street.
The Dow Jones Industrial Average (DJI) plummeted 1,679.39 points, or 4%, to close at 40,545.93. The S&P 500 tumbled 274.45 points, or 4.8%, finishing at 5,396.52, while the tech-heavy Nasdaq Composite collapsed 1,050.44 points, or 6%, ending at 16,550.61.
The Russell 2000 index of smaller companies was hit particularly hard, falling 134.82 points, or 6.6%, to 1,910.55, officially entering bear market territory with a decline of more than 20% from its recent peak.
Trump’s Tariffs and China’s Retaliation Spark Global Concerns
The market rout followed President Trump’s announcement of the “Liberation Day” tariffs, which impose a baseline 10% duty on all imports starting April 5, with rates potentially rising to as high as 54% depending on what tariffs other countries levy on U.S. exports.
China’s commerce ministry responded on Friday by announcing a 34% levy on all U.S. products, matching the tariff rate on Chinese goods coming into the U.S. This escalation has significantly heightened fears of a full-blown trade war that could derail global economic growth.
Economists and financial experts have expressed serious concerns about the impact of these tariffs on U.S. economic growth, particularly regarding inflation, which has remained stubbornly high despite the Federal Reserve cutting benchmark interest rates by 1% last year.
Recession Fears Mount as Investors Seek Safety
JPMorgan has raised the odds of a U.S. recession this year to 60% from 40%, with chief economist Bruce Kasman warning that “full implementation of announced policies as a substantial macroeconomic shock” could push both the U.S. and global economy into recession.
The 10-year Treasury yield fell below 4% as investors flocked to bonds for safety. Market participants are increasingly concerned about the possibility of stagflation—a toxic combination of high inflation and economic stagnation.
Major Stocks Making Headlines
Several prominent stocks experienced significant movements amid the broader market turmoil:
– **Nike Inc.** (NKE) plunged 14.4%, making it the biggest loser among Dow components. Bernstein cut its target price to $85 from $95, citing growth challenges amid the escalating trade war.
– **Apple Inc.** (AAPL) dropped 5% in premarket trading due to concerns about potential price hikes of 30-40% for iPhones if new tariff costs are passed to consumers.
– **Nvidia Corporation** (NVDA) fell 7.81% as tech companies with significant exposure to China faced heightened selling pressure.
– **Tesla Inc.** (TSLA) declined 5.47% amid concerns about its global supply chain and Chinese market exposure.
– **Lamb Weston Holdings Inc.** (LW) was a rare bright spot, gaining 10.01% after JPMorgan raised its target price to $66 from $65, citing strong third-quarter revenue growth.
– **RH** (RH) collapsed 40.09%, leading the day’s biggest losers.
– **Stellantis NV** (STLA) announced temporary layoffs of 900 workers in the U.S. and production pauses in Mexico and Canada in response to the new tariffs.
Economic Data and Upcoming Events
The market selloff overshadowed the release of several economic indicators. The Institute of Supply Management reported that the services PMI for March came in at 50.8%, missing the consensus estimate of 52.9% and below February’s reading of 53.5%. The employment index dropped to 46.2% in March from 53.9% in February, suggesting potential weakness in the labor market.
Investors are now focused on the March jobs report, released today. Economists polled by Dow Jones expected nonfarm payrolls to rise by 140,000 jobs and the unemployment rate to hold steady at 4.1%.
Looking ahead, key economic events for next week include:
– Consumer credit data (Monday, April 7)
– NFIB small business optimism index (Tuesday, April 8)
– Minutes of the Federal Reserve’s March FOMC meeting (Wednesday, April 9)
– Consumer Price Index for March (Thursday, April 10)
– Producer Price Index for March (Friday, April 11)
Market Outlook and Investor Sentiment
The three major indexes are on track to finish the week squarely in the red. The Nasdaq Composite and S&P 500 have tumbled 4.5% and 3.3%, respectively, week to date, marking their worst weekly performances since September 2024 and sixth negative week out of the last seven.
The S&P 500 has fallen back into correction territory, down about 12% from its February all-time high. For the year, the S&P 500 is down 8.2%, the Dow has fallen 4.7%, and both the Nasdaq and Russell 2000 have declined 14.3%.
Michael Arone, SPDR chief investment strategist at State Street Global Advisors, summed up the market sentiment: “The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results. Investors are selling first and asking questions later.”
As global markets continue to digest the implications of escalating trade tensions, investors should prepare for continued volatility in the days ahead, with particular attention to upcoming economic data releases and any developments in trade negotiations between the U.S. and its major trading partners.
