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The session results indicated a significant downturn in major indexes with the S&P 500 falling by 5.97%, the tech-heavy Nasdaq dropping 5.82%, and the Dow Jones Industrial Average decreasing by 5.5%.
Today marked the worst day for the stock market since 2020 during the COVID-19 pandemic, surpassing the substantial losses recorded on Thursday.
Over these two days, stock market capitalization losses have reached a record $6.4 trillion, according to estimates, with the total rising to $10 trillion since President Trump’s inauguration.
For the week, the Nasdaq was down 10%, the S&P 500 decreased by 9%, and the Dow declined by 8%.
On Wednesday, President Trump announced general tariffs of 10%, set to be effective shortly, with higher specific rates for major trade partners such as the European Union and China. However, he suggested on Thursday that he might negotiate these rates if other countries offered him something “phenomenal.”
In response, China announced a 34% tariff on imports from the U.S., equal to the rate levied by the U.S. on Chinese imports, starting April 10. Additionally, China outlined sanctions against U.S. companies and limits on the export of rare earth materials.
A message from Trump at the end of the trading session did not appear to alleviate investor concerns, despite his claim on his social network, Truth Social, that “ONLY THE WEAK FAIL” and his accusation that China is “panicking.”
Highlighting this tension, the volatility index (VIX), known as the ‘fear index,’ reached its highest point since the pandemic.
JPMorgan Chase, the leading bank in the U.S., raised its recession probability forecast for the country from 40% to 60%, citing the economic impact of the sharp increase in tariffs.
Federal Reserve Chairman Jerome Powell stated that tariffs are likely to lead to higher persistent inflation and slower economic growth, posing “an increased risk to employment.”
Powell noted that the heightened uncertainty prevents consideration of lowering the benchmark interest rate.
However, shortly before this, Trump wrote on Truth Social that “this would be the PERFECT time for Fed Chairman Jerome Powell to lower the interest rate.”
Within the technology sector, which had been driving gains on Wall Street, significant losses were recorded, exemplified by Intel (-11.50%), Palantir (-11.47%), Tesla (-10.42%), and Nvidia (-7.36%).
