Trump’s Tariffs Shake Markets, Raise Recession Fears
Global markets on Thursday were severely rattled by President Donald Trump’s historic tariff announcement, which threatens to throw the US and the rest of the world into a recession.
The Dow fell 1,679 points, or 3.98%. The broader S&P 500 was down by 4.84% and the tech-heavy Nasdaq plunged 5.97%. All three major indexes posted their biggest single-day drop since 2020.
Global markets also fell sharply Thursday. Europe’s benchmark STOXX 600 index tumbled 2.57%, erasing its gains since January. Germany’s DAX index fell 3%. France’s benchmark index slumped 3.31%, its biggest single-day drop since July 2023. Italy’s benchmark index slumped 3.6%, its biggest single-day drop since March 2023.
In Asia, Japan’s Nikkei 225 index sank 2.77% and Hong Kong’s benchmark Hang Seng index fell 1.52%.
The significant declines come after Trump’s massive tariffs imposed on practically all goods coming into the United States sparked fears that the new policy could trigger significant backlash from trading partners and take down the global economy.
That’s part of the reason the US dollar fell to its weakest level since October on Thursday, wiping out its gains since Trump’s reelection in November. Tariffs in theory should boost the dollar, but investors’ concerns that the United States is creating a self-inflicted wound that would stymie its long-term growth sent the dollar sinking against other global currencies.
“They’re ignoring every rule of classic micro and macro economics. This is the policymaking equivalent of a suicide bomber,” Michael Block, market strategist at Third Seven Capital, told CNN’s Matt Egan.