U.S. Stocks Crater Amid Tariff Fears and Global Sell-Off

U.S. stocks faced a dramatic downturn on Thursday, marking the most severe one-day drop since 2020.

The Dow Jones Industrial Average took a massive hit, falling nearly 1,700 points, which ranks as one of the most significant single-day point losses in its history. The sell-off followed the introduction of unexpected tariffs that rattled global markets and sent shockwaves through the financial sector.

Tech stocks bore the brunt of the impact, with the Nasdaq Composite plunging by 6% as major players like Apple and Nvidia faced steep declines. Apple’s shares fell over 9%, driven by concerns about disrupted supply chains after China, a key source of components, was targeted with additional U.S. tariffs. Nvidia and other chip manufacturers also struggled, with Nvidia itself losing more than 7%. Collectively, the leading tech companies—dubbed the “Magnificent Seven”—shed more than $900 billion in market value.

Smaller companies didn’t escape the downturn either, as the Russell 2000 index dropped by 6.4%, officially entering bear market territory. This widespread decline was mirrored by a drop in the 10-year Treasury yield, which hit 4.05%—its lowest point since late 2024—as investors sought safer assets. The dollar also weakened significantly, with the dollar index falling by 1.5%.

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The new tariffs, which were announced just a day earlier, have been dubbed “Liberation Day” duties. They include a baseline 10% rate on all trading partners, but countries considered problematic face even steeper charges. China, in particular, saw its rate surge to 54%, triggering worries across various industries reliant on Chinese imports.

Markets around the globe reacted strongly to the news, fearing that retaliatory measures from U.S. trading partners could spark a global trade conflict. In Europe, the Stoxx 600 dropped by more than 2.5%, while Japan’s Nikkei 225 fell by 2.7%, reaching its lowest point since August.

Amid the financial chaos, the administration downplayed concerns, insisting that the markets would bounce back. However, the global reaction suggests that investors remain wary of the broader economic implications and the potential for a prolonged downturn.

Kosta Gushterov