'Worse than expected': Wall Street reacts to Trump's 'Liberation Day' tariff surprise, stocks sink

President Trump amazed markets again connected Wednesday, announcing steep reciprocal tariffs connected a scope of trading partners successful summation to a "baseline" reciprocal tariff complaint of 10% successful a determination that sent markets tumbling.

"The tariffs were decidedly worse than we had anticipated," Deutsche Bank elder US economist Brett Ryan told Yahoo Finance.

For example, Chinese imports are acceptable to beryllium deed by a 34% tariff portion imports from the European Union volition beryllium dealt 20% tariffs. Trump said the tariff calculations were really lone "half" of what they could've been had the medication chose to lucifer White House estimates of however different countries tariff the US.

Stocks sold disconnected sharply pursuing Trump's announcement.

The diminution successful US banal futures was led by Nasdaq 100 futures, which were down much than 4.5% adjacent 6:15 p.m. ET. S&P 500 futures were down 3.5% portion contracts tied to the Dow were disconnected person to 2.2%.

Megacap tech stocks were nether dense selling unit successful extended trading, with Apple banal down much than 6% and Nvidia (NVDA), Meta (META), Amazon (AMZN), and Tesla (TSLA) shares each sliding much than 4%.

Ryan added his squad had expected the effectual tariff complaint to onshore successful a scope of 15%-20%. Wednesday's announcement suggests the wide effectual tariff complaint connected each US imports volition beryllium successful a scope person to 25%-30%.

Strategists astatine Evercore ISI placed the effectual tariff complaint astatine 29% successful a enactment precocious Wednesday. This projects the US tariff complaint volition basal astatine its highest level successful much than a century.

"I wouldn't accidental it's outright recessionary," Ryan added. "I would accidental that it surely increases the hazard of recession."

Renaissance Macro's caput of economics, Neil Dutta, described the announcements arsenic a "a monolithic daze to the economy."

"It's astonishing stocks are not down adjacent more," Dutta wrote astatine 5 p.m. ET connected Wednesday. "Perhaps investors presume cooler heads prevail later. I would not clasp your breath."

As investors digest the latest levies, the looming marketplace question remains for however agelong Trump volition enforce these tariffs and whether different countries volition retaliate oregon negotiate.

Given the expected tit-for-tat that could play retired betwixt the US and immoderate partners, Wall Street strategists don't judge Wednesday volition service arsenic a "clearing event" wherever the tariff hazard is swiftly priced successful with a one-time, sweeping sell-off.

Stuart Kaiser, Citi's caput of US equity trading strategy, wrote successful a enactment to clients precocious Wednesday that the tariff announcements were worse than capitalist expectations and helium doesn't urge buying the dip successful stocks yet.