Trump's Tariffs Are Crushing the Stock Market: Here's What All Investors Need to Know

1 week ago 4

Matt Frankel, The Motley Fool

Thu, Apr 3, 2025, 9:10 AM 5 min read

To accidental that the banal marketplace is having a antagonistic absorption to President Donald Trump's reciprocal tariffs would beryllium a large understatement. As of 10:30 a.m. ET, the Dow Jones Industrial Average (DJINDICES: ^DJI) was down by astir 1,500 points, a diminution of 3.5% for the day. The S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) were faring adjacent worse, down by 4% and 5.1%, respectively.

The small-cap Russell 2000 scale is taking the worst deed of the header indexes. It's down by astir 6% for the time arsenic I constitute this, and is present 21% disconnected its high, putting it into carnivore marketplace territory.

Given the market's reaction, it's important to instrumentality a measurement backmost and digest what the tariffs mean for investors and what could hap next. Here's a speedy rundown of the quality and what investors should beryllium focusing on.

First, here's a speedy overview of the news. President Trump announced "reciprocal tariff" rates connected much than 180 countries astir the world.

The president shared charts of the caller tariff rates, breached down by country, claiming that the rates are astir fractional of what each state is charging the United States. However, the numbers are importantly higher than galore experts had predicted arsenic the medication is including "currency manipulation and commercialized barriers," successful summation to the tariffs each state charges connected U.S. goods.

The program has a 10% baseline tariff, but imports from galore countries are facing overmuch higher rates. For example, China is receiving a 34% tariff connected apical of the 20% existing tariff successful place. And conscionable to sanction a fewer others:

The European Union is getting a 20% tariff nether Trump's plan.
Vietnam is 1 of the hardest-hit countries, with a 46% reciprocal tariff.
Japan is receiving a 24% rate, and India volition person a 26% tariff.
The U.K., Brazil, Singapore, Chile, and Australia are examples of countries that are getting the baseline 10% rate.

All of the large banal marketplace averages were sharply little connected the tariff news. In short, the tariffs were overmuch harsher than astir experts had expected, and this is seen arsenic some an further ostentation and recession risk.

But immoderate sectors, industries, and groups of stocks are being deed harder than others, including:

Companies that chiefly merchantability imported goods are getting crushed. One large illustration is discount retailer Five Below (NASDAQ: FIVE), which was down by astir 30% connected the news.
Companies that merchantability and manufacture goods successful planetary markets are besides getting deed hard. For example, tech heavyweight Apple (NASDAQ: AAPL) was down by 9%.
Tech stocks, successful general, are 1 of the worst performing parts of the market, arsenic evidenced by the Nasdaq's underperformance. Many of these aren't excessively exposed to tariffs, but exertion tends to get deed hard erstwhile the marketplace is perceived arsenic "risky."