US stock markets witnessed a sharp selloff on Thursday as President Donald Trump’s reciprocal tariffs sent shockwaves through global markets, heightening fears of an economic downturn. The Dow Jones Industrial Average tumbled over 1,100 points, while the Nasdaq Composite plummeted by more than 800 points in early trading. The S&P 500 also slumped nearly 4%, reflecting deep investor anxiety over escalating trade tensions and their economic impact.
Despite Trump’s claims that the tariffs are designed to strengthen the US economy, market analysts and economists are warning that the aggressive trade measures could tip the world into a full-blown recession.
Apple, Nike, and Tech Giants Take a Massive Hit
The hardest-hit sector was technology and retail, with stocks of major US corporations tumbling in response to the tariff escalation.
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Apple shares fell over 9%, as the company braces for an estimated $40 billion tariff cost, according to Rosenblatt Securities.
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Nike declined nearly 13%, as higher tariffs on Asian production hubs are set to raise costs across the apparel industry.
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Dell and HP crashed nearly 17% each, with analysts warning that increased tariffs could drive up costs by $200 to $500 per unit.
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Amazon, Nvidia, Walmart, Target, Microsoft, Alphabet, and Tesla also saw sharp declines, reflecting the widespread uncertainty in the market.
The tech industry, which relies heavily on Asian manufacturing, is expected to suffer significantly, with supply chain disruptions and shrinking profit margins.
Retail Stocks Under Pressure as Supply Costs Soar
The retail sector also bore the brunt of the selloff, with Amazon, Walmart, and Target facing declines as they struggle to manage rising import costs. Many US retailers source their products from Asia, where Trump’s tariffs are particularly steep:
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China: 54% aggregate tariff
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Vietnam: 46%
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Cambodia: 49%
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Indonesia: 32%
With production costs rising, retailers may be forced to increase prices, which could reduce consumer demand and impact sales. Analysts at Jefferies warned that "all footwear and apparel company margins will be hit as costs rise."
Banking and Auto Stocks Plunge Amid Recession Worries
Financial stocks, often seen as economic bellwethers, also faced heavy losses:
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JPMorgan Chase & Co, Citigroup, and Bank of America declined sharply, as fears of a slowing economy spooked investors.
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Regional banks also suffered losses, with concerns that lower loan demand and higher credit risks could hit profitability.
The auto industry also came under intense pressure, as additional 25% auto tariffs were imposed.
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Ford and General Motors dropped over 3% each, while Tesla tumbled 6%.
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According to the Anderson Economic Group, new tariffs could raise prices for low-cost American cars by $2,500 to $5,000, while imported models could become up to $20,000 more expensive.
What’s Next?
With the markets in turmoil, investors are now looking at Federal Reserve policy and upcoming economic data for clues on the next steps.
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Traders are now betting on at least three Fed rate cuts this year, with the possibility of a fourth cut growing.
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Friday’s payroll data and Fed Chair Jerome Powell’s speech will be closely watched to gauge the central bank’s stance on interest rates.
As the trade war escalates, global markets remain on edge, with fears that Trump’s aggressive tariff strategy could lead to prolonged economic instability and a potential recession.
