Donald Trump’s sweeping tariffs trigger biggest one-day Wall Street fall since 2020 – as it happened (2025)

With recession fears bubbling, asset management firm Schroders is among those cutting its US growth forecasts.

Johanna Kyrklund, Group Chief Investment Officer at Schroders, explains why:

Certainly, Trump’s opening salvo points to higher tariffs than we were expecting, and our economic forecasts are being adjusted downwards with an expectation of around 1% US GDP growth for 2025.

This leads us to reduce our weight in equities, and we see value in government bonds as a hedge against the risk of recession for the first time in this cycle. We continue to like gold as it benefits from both weaker growth and the more structural risk posed by rising debt levels.

Going forward the reaction of the rest of the world will be critical. The countries on the list will have to make their decision either to retaliate and escalate the war – or to contemplate reducing their trade imbalance with the US. How long this will take will also matter for the market.

But let’s also try and tease out some positives. Trump’s framework, laid out on a physical chart, is clear. One might dispute the approach – of using each country’s trade deficit with the US – but by applying the principle of imposing 50% of the calculated rate they have laid out a clear framework for negotiation. This might feel like a game of snakes and ladders, but at least we are starting to understand the rules. That gives markets a basis for pricing these risks.

On days such as today, braver investors can be tempted to ‘buy the dip’, calculating that what goes down must go up again.

But today, legendary investor Bill Gross is urging prospective dip-buyers to stay on the sidelines.

Gross told Bloomberg that the Trump tariffs are comparable to Richard Nixon’s decision to break the US dollar’s link to gold in 1971.

“Investors should not try to ‘catch a falling knife’.

This is an epic economic and market event similar to 1971 and the end of the gold standard except with immediate negative consequences.”

Donald Trump has claimed that his new tariff plan is “going very well.”, despite world stock markets taking a hammering today.

CNBC reports:

“The markets are going to boom, the stock is going to boom, the country is going to boom,” he told reporters as he departed the White House.

“The rest of the world wants to see, is there any way they can make a deal?” he said.

There’s no sign of this ‘boom’ yet, though…

The head of America’s Federal Trade Commission, Andrew Ferguson, has warned US retailers not to use tariffs as an excuse to hike prices.

He posted on X:

President Trump is reorienting our nation’s economy to put Americans first. As we adjust to the new economic order, the @FTC will be watching closely to make sure American companies are vigorously competing on prices.

These necessary tariffs should not be interpreted as a green light for price fixing or any other unlawful behavior. We will always protect American consumers.

This could be an interesting issue to adjudicate on. The new tariff of 20% means goods from Europe will cost US importers a fifth more than before. But that doesn’t justify raising the price paid by consumers by 20%, given other costs – such as wages, transport – won’t have also risen in line with tariffs.

So much for the idea that “liberation day” would free financial markets from their fear of the unknown, my colleague Nils Pratley writes.

Publication of precise tariff rates, went a cheerful line of advance thinking, would at least allow investors to assess the probable trade effects on the basis of hard information. True optimists clung to the idea that Donald Trump would not wish to risk a truly severe market reaction.

That narrative was blown apart when the president reached for his pub-style display of wares. This really was a case of going back to the tariffs rates of the 1920s or 1930s. Not even the penguins of Heard Island and the McDonald Islands were spared….

On a lighter note…

Percy Pig’s US invasion could be called to a halt amid fears that Donald Trump’s tariffs could affect sales of Marks & Spencer’s popular confectionery brand which has just launched in Target stores across the Atlantic.

Archie Norman, the chair of M&S, has described Percy as the retailer’s “gift to America” but he told the Retail Technology Show in London that “we might have to change our minds” as Trump imposes additional taxes on imported goods. While M&S is not considering withdrawing the sweets, tariffs could push up prices and make them less popular.

The pink confectionery which sells more than 18m bags a year in the UK and is apparently enjoyed by celebrities including Adele and Olivia Rodrigo, went on sale in the US on 30 March both in Target stores across the US and on its website in what was described as Percy’s “biggest journey to date”.

Canadian PM Mark Carney declared earlier today that

Canada will retaliate against “unjustified, unwarranted” tariffs imposed by the United States with a 25% tax on US vehicles.

Carney told a press conference:

“The president’s actions will reverberate here in Canada and across the world.

They are all unjustified, unwarranted, and in our judgment misguided.”

UK business lobby group the CBI has welcomed the UK government’s decision today to launch a consultation about possible retaliatory action against the US.

Rain Newton-Smith, Chief Executive, CBI, said:

“With uncertainty running high amongst the business community over the damaging impact of incoming tariffs, seeking input from firms on the UK’s potential response is a smart play in keeping with the government’s pragmatic and calm reaction to the events of the last 24 hours.

“On the global stage, the ability to be flexible and move at pace is critical to safeguarding the UK’s national and economic interests.

“During challenging times, it is critical that business and government are united. This is an important moment for industry to use its voice to shape what comes next.”

Back in New York, the sell-off is refusing to abate.

With around two hours trading to go, the Dow Jones industrial average is still suffering a quadruple-digit points slump – it’s down 1,354 points or 3.2% at 40,870.

The S&P 500 index is down over 4%, while the tech-focused Nasdaq has shed 5.2%.

These are seriously painful losses, reflecting concerns that Donald Trump’s trade war will hurt the US economy, and the rest of the world too.

Donald Trump isn’t always the easiest politician to decipher, but this post – on his Truth Social site today – suggests the US president is sticking with his tariffs plan:

THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!!!

Larry Summers, the former US Treasury Secretary, is scathing about the calculations behind the new Trump tariffs (see earlier post for the details).

It’s been one of /those/ days….

It is clear that market sentiment is fragile, and today’s losses might not be the end of the selling, warns Fawad Razaqzada, market analyst at City Index and FOREX.com.

Critics argue that the US administration is playing a high-stakes game, where short-term economic pain may outweigh any long-term gains. Should global economic growth falter due to escalating trade tensions, American exporters could find themselves in a precarious position, negating any perceived benefits of improved trade terms.

UBS analysts estimate that if these tariffs are made permanent, US inflation could surge to 5%, driven by soaring import costs. This creates a precarious situation for the Federal Reserve. Higher inflation could demand further rate hikes, but with economic growth already under pressure, tightening monetary policy risks exacerbating the downturn.

The spectre of stagflation—weak growth paired with rising prices—now looms large. If retaliatory measures escalate the trade war further, concerns about a prolonged economic slowdown will intensify

WTO director general Ngozi Okonjo-Iweala has issued a statement about the new US tariffs:

“These measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1% in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections.

I’m deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade.”

With European markets closed, and New York traders contemplating a quick lunchtime break, it’s time for another recap.

US stock markets have tumbled on Thursday as investors parsed the sweeping change in global trading following Donald Trump’s announcement of a barrage of tariffs on the country’s trading partners.

All three major US index funds were down as trading started on Thursday morning. The tech-heavy Nasdaq fund was down 4.5%, while S&P 500 and the Dow dropped 3.4% and 2.7% at opening, respectively.

Bloomberg calculated that around $2 trillion has been knocked off the value of the S&P 500 index today, with tech giant Apple among the big fallers.

Meanwhile, the US dollar hit a six-month low, going down at least 2.2% on Thursday morning compared to other major currencies.

• This followed heavy losses in Asia, where Japan’s Nikkei index slumped to an eight-month low.

• Amid a sharp selloff in Europe, Britain’s FTSE 100 posted its biggest one-day fall since last August.

• Economists have been slashing their growth forecasts today, as they have digested the sweeping tariffs announced by Donald Trump last night. Some have warned that the US could slip close to recession.

• Forecasts for how high the US stock market will rise this year have been dramatically scaled back too.

• UK farmers warned they would be hurt by new tariffs…..amid warnings of ‘global economic warfare’.

“Donald Trump might be able to write off some of today’s commentary as hyperbole but even he can’t ignore the numbers,” says Danni Hewson, head of financial analysis at AJ Bell, adding:

“For a president who used to use Wall Street as his own personal scorecard, today’s market assessment of his tariff plans has been damning. Around $2.2 trillion has been wiped off the value of global stock markets at the time of writing, with the US bearing the brunt of the tariff induced sell-off and the Nasdaq set to experience its largest daily drop since March 2020.

“Comparisons will be made to 2020’s global pandemic and 2008’s financial crash, but looking forward we must consider that ‘Liberation’ may ultimately end in recession.

“Companies like Apple, which relies on its complicated global supply chain and on positive consumer sentiment, slumped a whopping 8% as investors pondered exactly how badly the tech company’s bottom line will be thwacked by this White House policy. Other tech companies from Dell to HP suffered double digit declines, along with retailer Target, Nike, and perhaps most ironically, the quintessential American brand Ralph Lauren was one of the biggest fallers on the S&P 500 today.

Economists have also been alarmed by the calculation dreamed up by the White House to calculate the new tariffs announced last night: