Wall Street Shaken by Trump’s Major Tariff Plan
U.S. stock futures plummeted in extended trading Wednesday after President Donald Trump unveiled sweeping new tariffs affecting more than 180 countries and territories. The announcement, which Trump had dubbed “Liberation Day,” sent shockwaves through financial markets that had rallied during regular trading hours in anticipation of more moderate measures.
The tariff plan imposes a baseline 10% levy on all U.S. imports plus country-specific rates, including a 20% tariff on European Union goods, 46% on Vietnamese products, 32% on Taiwanese exports, and a staggering 54% total tariff on Chinese imports. The scope and severity of the measures exceeded analyst expectations, with CNBC reporting that Trump’s “quality of mercy was nowhere to be seen.”
Markets responded immediately and severely to the announcement. Futures tied to the Dow Jones Industrial Average tumbled 1.9%, while S&P 500 futures sank 2.8% and Nasdaq-100 futures plunged 3.5% in late trading. This dramatic reversal came after all three major indexes closed higher during regular trading hours, with the S&P 500 rising 0.7% and the Nasdaq Composite adding 0.9%.
Tech Stocks Bear the Brunt
Technology companies, particularly those with significant manufacturing exposure in affected countries, faced the steepest declines. Apple shares dropped more than 6% in extended trading as investors grappled with implications for its China-based manufacturing operations. Nvidia, which produces new chips in Taiwan, fell approximately 5.7%, while other tech giants including Amazon and Tesla each declined between 5% and 8%.
U.S. Treasury Secretary Scott Bessent attempted to downplay the connection between the market reaction and trade policy, suggesting that the sell-off stemmed more from “a sharp pullback in the biggest technology stocks” rather than from White House trade measures, according to Investopedia.
However, market analysts disagreed with this assessment. “The details of the tariffs as revealed Wednesday were far worse than expected,” wrote Northlight Asset Management chief investment officer Chris Zaccarelli in emailed comments. “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.”
⚠️ S&P 500 PLUNGES 4% after Trump’s tariff bombshell.
— Brian Allen (@allenanalysis) April 2, 2025
Wall Street just rang the alarm. Trump’s across-the-board tariff plan—10% on everything plus higher rates for key trading partners—sent markets into a tailspin.
This isn’t a trade strategy. It’s a wrecking ball aimed… pic.twitter.com/zHQ56Lv59j
Consumer Goods and Manufacturing Concerns
Retail and consumer-focused companies also faced significant pressure. Nike and Walmart both retreated 7% in late trading, while Deckers Outdoor, owner of shoe brands such as UGG and Hoka, plunged 12%. The impact was particularly pronounced for companies with substantial manufacturing presence in Vietnam, which faces a 46% tariff under the new plan.
“For years, Vietnam was a popular alternative for companies, such as footwear brands and furniture manufacturers, trying to avoid the crossfire of U.S. trade tensions with China,” CNBC noted. “But Trump’s planned 46% tariff on Vietnam will change the picture.”
Economic Slowdown Predicted
Economists quickly revised their growth forecasts downward following the announcement. Comerica Bank Chief Economist Bill Adams indicated his bank would reduce its 2025 forecast for inflation-adjusted real GDP growth to 1.7% from the previous 2.5% estimate issued in February.
“The tariffs will mean less disposable spending power in consumer pockets,” Adams explained, “weighing on economic growth and hiring in the rest of 2025.” He suggested that consumer and business sentiment could potentially recover later in the year if “the national conversation turns away from tariffs and trade war and toward the tax cuts that the tariffs might help fund.”
The far-reaching tariffs will likely take time to filter through to consumer prices, but investors are already positioning for potential inflationary pressure. Gold futures climbed to approximately $3,170 per ounce, hovering near record highs as traders sought safe-haven assets. Meanwhile, Bitcoin fell from around $88,000 to below $83,000 following the announcement.
As markets digest the implications of this dramatic shift in trade policy, analysts suggest the full economic impact will depend on whether these initial tariff rates serve as opening positions for negotiations or represent the administration’s final policy stance. Either way, the immediate market reaction signals that investors see significant risk to corporate earnings and economic growth in the months ahead.
