Why Wall Street fears that Trump's Liberation Day tariffs just sent the S&P 500 into a 'growth scare'

President Trump has liberated Mr. Market, and the beast looks keen to blast done a cardinal method level connected the S&P 500 (^GSPC).

In a "Liberation Day" spectacle astatine the White House, Trump uncorked a baseline tariff complaint of 10% connected countries that volition spell into effect connected April 5.

Additional tariffs volition beryllium added for immoderate countries that the medication considers to beryllium the worst commercialized offenders.

Some of those countries are important sourcing and concern regions for galore ample US companies specified arsenic Apple (AAPL), Nike (NKE), and Walmart (WMT). China, for example, volition spot an estimated tariff complaint of 54%. Vietnam clocks successful astatine 46%. Japan is astatine 24%.

Read more: What Trump's tariffs mean for the system and your wallet

"This was a antagonistic daze for markets," 1 root told maine by text.

Markets don't similar to beryllium shocked, and they are reminding investors of that precise truth.

As of this writing, the Dow Jones Industrial Average (^DJI) is down much than 1,000 points premarket. The S&P 500 is down by 3%, akin to the Nasdaq Composite (^IXIC). Market leaders successful Apple and Nvidia (NVDA) are down 7% and 6%, respectively premarket.

But marketplace goers are specifically locked successful connected the S&P 500 arsenic a gauge of post-tariff sentiment, peculiarly the index's March 13 closing debased of 5,527.50.

At this moment, the S&P 500 is poised to unfastened astatine 5,538. A breakthrough beneath the March lows intraday coupled with a caller closing debased could truly harm sentiment further, pros warn.

Read much astir today's marketplace enactment successful effect to Trump's tariffs.

"We confess that we were feeling amended astir the quality of the S&P 500 to support its mid-March debased coming into Wednesday, lone to person that glimmer of optimism dissipate again connected Wednesday evening," RBC Capital Markets strategist Lori Calvasina wrote successful a enactment aboriginal Thursday.

"Like astir analysts and strategists, we'll beryllium digesting the implications of the recently announced reciprocal tariffs successful the coming days," Calvasina wrote. "For now, we reiterate our presumption that if the S&P 500 breaks meaningfully beneath the mid-March 2025 low, we deliberation it's apt the scale volition autumn into the 4,900-5,300 scope for a 'growth scare' drawdown of 14-20% from the February 2025 peak, akin to the maturation scare drawdowns of 2010, 2011, 2015-2016, and 2018."

Others connected the Street hold with Calvasina but contend a crisp determination little whitethorn acceptable the array for a short-term bottommost successful stocks. All the sellers would beryllium cashed out, said BTIG method strategist Jonathan Krinsky.