Stocks fell around the world Thursday morning, as President Trump’s sweeping tariff plan kicked off a trade war with broad consequences for the global economy.
Why it matters: The stock market is not the economy, but the reaction is an early, visceral demonstration of the fear the public has over rising prices, slowing growth and the possibility of a recession.
By the numbers: Major indices fell sharply.
- Japan’s Nikkei closed 2.8% lower and the pan-European Stoxx 600 index was down 1.5% in early trading.
- In the U.S., S&P 500 futures dropped about 3%, while the tech-heavy Nasdaq looked to be down about 3.5%.
Zoom in: Apparel and retail companies led the decline.
- Names like Lululemon, Dollar Tree, Deckers Outdoor and Nike were all down around 9%-10% in early pre-market trading.
- The Magnificent 7 stocks that led markets higher the last two years were broadly lower as well, with Apple down 7%.
- Per FactSet data, 489 of the S&P 500 stocks were down early Thursday.
What they’re saying: “Markets are going to continue to struggle with the speed at which tariff details change as well as the ultimate result of the tariffs themselves (e.g. the magnitude of the tariffs),” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in a note.
- “The silver lining for investors could be that this is only a starting point for negotiations with other countries and ultimately tariff rates will come down across the board – but for now traders are shooting first and asking questions later.”
The big picture: Over the long term, it’s not necessarily unusual for U.S. stocks to be down 3% in a day— historically, it happens on average almost four times a year, per a 2018 analysis.
- But lately it’s been rarer — the last 3% down day for the S&P 500 was in August 2024, and before that September 2022.
Go deeper… Trump’s tariffs list is missing one big country: Russia
