On April 3, 2025, U.S. financial markets experienced their most significant decline since 2020, following President Donald Trump's announcement of extensive new tariffs. The S&P 500 dropped by 4.8%, erasing approximately $3.1 trillion in market capitalization; the Dow Jones Industrial Average fell by 4%, and the Nasdaq Composite decreased by nearly 6%. The small-cap Russell 2000 entered bear market territory with a 6.6% decline.
The newly imposed tariffs include a universal 10% rate on all imports, with higher levies for specific countries such as China and Vietnam. This policy shift has raised concerns among investors about potential retaliatory measures, economic growth, and inflation. The technology sector was notably affected, with major companies like Apple, Amazon, and Nvidia experiencing significant stock declines.
Investors are now looking to upcoming economic indicators, including the March jobs report and a speech by Federal Reserve Chair Jerome Powell, for insights into how these tariffs might influence inflation and interest rate policies. There is heightened apprehension regarding potential international retaliation and its implications for economic growth.
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