Futures on the S&P 500, which allow investors to trade the index outside normal trading hours, slumped more than 3%. Asian and European stock markets fell sharply, with benchmark indexes dropping more than 3% in Japan, and nearly 2% in Hong Kong, South Korea, Germany and France.
The value of the U.S. dollar against a basket of other major currencies dropped more than 1%.
The slide came after Trump, speaking at a ceremony at the White House on Wednesday, announced a new 10% base line tariff on all imports as well as country-specific taxes on goods from a host of other countries. Those included an additional 34% tax on Chinese imports, on top of 20% in tariffs he recently put on China, and 20% on goods coming from the EU and 24% on Japanese imports.
The market reaction suggested that the scale of the tariffs Wednesday had come as a surprise, and there was confusion about how the figures had been derived.
“The numbers are shockingly high compared to what people were expecting and it is inexplicable in many ways,” said Peter Tchir, head of macro strategy at Academy Securities. “I think it’s a disaster.”
The Trump administration had modified its estimates of the tariffs imposed on the United States to include adjustments for what it deemed currency manipulation or even other taxes, with analysts questioning the analytical basis for doing so.
“Trump is going to war with countries on this,” said Andrew Brenner, head of international fixed income at National Alliance Securities. “It’s ridiculous. It shows no comprehension as to what he is doing to other countries. And it is going to hurt the U.S.”
Investors flocked to government debt as a haven. The yield on the 10-year U.S. Treasury bond, which moves inversely to prices, fell to 4.08%, the lowest since October.
The prospect of weaker global economic growth also weighed on commodities, with Brent crude oil, the international benchmark, dropping 4% to around $71.90 a barrel.
The Stoxx Europe 600 fell 1.7% Thursday, with most sectors, including banks, technology and consumer goods, in the red.
Shares in consumer brands slumped as the Trump administration imposed steep tariffs on countries that are manufacturing hubs for shoes and clothing, for example a 46% tariff on Vietnam and 32% on Indonesia. Shares of Adidas and Puma each dropped about 9% in Frankfurt, Germany. The stock of Pandora, a Danish jewelry company that makes its products in Thailand, tumbled 12%. Nike’s shares dropped more than 8% in premarket trading in New York.
Shares in Maersk, the Danish shipping giant, fell 7% on fears of a global trade slowdown. Big European banks including HSBC, Commerzbank and Deutsche Bank dropped more than 4%.
Stock markets globally have been choppy in recent weeks, as investors have been whipsawed by the administration’s mixed messages on tariffs. Trump has previously announced, delayed, changed and ultimately imposed tariffs on Canada, Mexico, steel, aluminum, cars and auto parts.
Japan’s Nikkei 225 fell into a correction Monday and was jolted again Thursday, with analysts and trade experts in Tokyo caught off guard by Trump’s announcement of a 24% tariff on Japanese products. A number of business executives in Tokyo had earlier said they were optimistic that Japan’s low average tariff rate might help save it from high tariffs.
The uncertainty around the tariff levels, and how long they might last, has made it difficult for investors, economists and policymakers to assess the potential ramifications for consumers, businesses and the broader economy.
The U.S. tariff rate on all imports is now around 22%, from 2.5% in 2024, said Olu Sonola, the head of U.S. economic research at Fitch Ratings. That rate was last seen around 1910, he said.
Through Wednesday, the S&P 500 had fallen 7.7% below its most recent peak in February. The Nasdaq composite index, which is chock-full of the tech stocks, was down almost 13% since its peak in December. In premarket U.S. trading, tech stocks were among the biggest losers. Shares in Apple were down more than 6%, Amazon was down nearly 5% and shares in Nvidia and Palantir dropped about 3% each.
In Asia, the stocks tumbled for a wide range of companies including technology and semiconductor giants, as well as major auto exporters. Shares of Japanese automaker Toyota fell more than 5% Thursday, while South Korea’s Samsung Electronics fell close to 3%.
Signs of worry have also been evident in the rapid rise in the price of gold. Investors have flocked to the precious metal, sending it 19% higher in the first three months of the year, its biggest quarterly rise since 1986. On Thursday, gold was trading at over $3,100 per troy ounce.
Although many investors worry about the inflationary effect of tariffs, falling bond yields and a declining U.S. dollar suggest that most are more worried about waning economic growth.
The dollar slid as Trump spoke from the White House Rose Garden. On Thursday, an index that tracks the dollar against other major currencies fell 1.1%, the worst day in more than a month.
Some investors had hoped that the tariff announcement Wednesday would cure some of the uncertainty in the financial markets. But few truly expected the news to be the end of Trump’s tariff talk and with it an end to the stock market volatility.
“Investors no longer see tariffs as a one-time event risk, but an always-present risk,” said Mandy Xu, head of derivatives market intelligence at Cboe Global Markets, adding that the current expectation in the market is for volatility to persist.
This article originally appeared in The New York Times.
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