See All Market Updates LiveMajor Indexes Suffer Worst Single-Day Losses Since 2020
The stock market experienced a dramatic sell-off on Thursday, April 3, 2025, following President Donald Trump’s announcement of “Liberation Day” tariffs, with the negative momentum continuing into Friday, April 4. Major indexes recorded their worst single-day performance since the early days of the coronavirus pandemic in 2020.
The Dow Jones Industrial Average (DJI) collapsed 4% or 1,679.39 points to close at 40,545.93 on Thursday, with futures indicating further losses of around 1,134 points (-2.78%) for Friday’s session.
The tech-heavy Nasdaq Composite was hit hardest, decimating 6% or 1,050.44 points to close at 16,550.61 on Thursday, with futures pointing to another decline of about 552.25 points (-2.96%) for Friday.
Trump’s “Liberation Day” Tariffs Spark Market Panic
The market rout was triggered by President Trump’s announcement of new baseline tariffs of 10% on all imports starting April 5, 2025. More concerning to investors is that tariff rates could increase to as high as 54% on certain countries, depending on what duties those governments levy on U.S. exports.
Economists and financial experts have expressed significant concerns about the effect of these tariffs on U.S. economic growth, particularly regarding inflation, which has remained stubbornly high despite the Federal Reserve cutting interest rates by 1% last year. Market participants increasingly fear a near-term recession or, in the worst case, stagflation in the U.S. economy.
“Magnificent Seven” Stocks Hit Hard
The market’s most influential stocks, known as the “Magnificent Seven,” have been particularly affected by the recent sell-off. Through the first three months of 2025, these mega-cap stocks have already shown negative performance, and Thursday’s plunge deepened their losses.
Nvidia Corporation (NVDA) fell 7.81% on Thursday and is now trading below both its 50-day and 200-day moving averages. The AI chip giant is down 18.3% year-to-date.
Apple (AAPL) has been leading the decline among the Magnificent Seven as concerns mount about the impact of Trump’s tariffs on its supply chain. The stock is down 13% year-to-date.
Tesla (TSLA) has been the worst performer of the group, down 34.7% year-to-date, though it showed some resilience on Tuesday with a 6% gain. The EV maker is currently trading around 50% below its all-time high of $488.53 set in December 2024.
Microsoft (MSFT) declined 2.21% on Thursday and is now down 19.7% from its all-time high. The software giant is trading at its cheapest valuation in years based on traditional metrics.
Amazon (AMZN) dropped 8.89% on Thursday and is now 25.8% below its all-time high, presenting what some analysts call “the best buying opportunity in more than a decade.”
Upcoming Market Events to Watch
As investors navigate this volatile market environment, several key events in the coming weeks could further impact trading:
1. **Earnings Season Kickoff**: The Cigna Group (CI) will release its first quarter 2025 financial results on Friday, May 2, 2025, marking the beginning of the Q1 earnings season.
2. **Economic Data Releases**: Important economic indicators are scheduled for release in April, including:
– Interest Rate Decision from the European Central Bank on April 17
– Building Permits and Philly Fed Manufacturing Index on April 17
– Bank Holidays in several countries on April 18, which could affect trading volumes
3. **Federal Reserve Developments**: Investors will be closely watching for any signals from Federal Reserve officials regarding potential policy responses to the new tariffs and their inflationary impact.
Market Outlook and Expert Opinions
Wall Street analysts are divided on the market’s near-term direction. Some view the current sell-off as a buying opportunity, particularly for high-quality companies now trading at discounted valuations. Others warn that the full economic impact of the new tariffs has yet to be priced into the market.
The fear-gauge CBOE Volatility Index (VIX) surged 39.6% to 30.02 on Thursday, marking its highest closing level since August 5, 2024, indicating significant market anxiety.
What Investors Should Consider
Given the current market conditions, investors may want to:
1. **Reassess Portfolio Allocations**: Consider whether your current asset allocation aligns with your risk tolerance in this more volatile environment.
2. **Look for Quality at a Discount**: Some high-quality stocks are trading at their lowest valuations in years, potentially offering long-term buying opportunities for patient investors.
3. **Stay Informed**: Keep a close eye on economic data releases and Fed communications for clues about the potential economic impact of the new tariffs.
4. **Maintain Perspective**: Remember that market corrections are a normal part of investing, and historically, patient investors have been rewarded for staying the course through periods of volatility.
As the market digests the implications of the new tariff policy and awaits the start of earnings season, volatility is likely to remain elevated in the near term. Investors should prepare for continued fluctuations while focusing on their long-term investment objectives.