US$2 trillion wiped from US stocks amid Trump tariff blitz
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The news: Around USD2 trillion ($3.14 trillion) was erased from the S&P 500 index in early trading on Thursday, stoking fears that Trump’s tariffs will push the economy into a recession.
The numbers: US stocks tumbled at the open, with the Dow industrials falling more than 1,500 points, the Nasdaq plunging 5% and the S&P 500 sliding 4%. Around 70% of companies in the index were trading lower at 9:35am in New York, with the index on track for its biggest decline since 2022.
Companies with supply chains dependant on overseas manufacturing for were the heaviest hit in early trading, with Apple losing USD250 billion in market value. Shares in Apple were down as much as 8.5% as trading opened in New York, enough to reduce its market capitalisation from USD3.37 trillion to USD3.12 trillion.
With manufacturing ties to Vietnam, Lululemon and Nike were down 10% and retailer Dollar Tree which has import-heavy inventory tumbled 11%.
The US dollar has tumbled 2.4% against rivals, on course for its largest daily decline since 2015.
The context: Global markets are reeling as the reality of Trump’s reciprocal levies sinks in, with investors and governments grappling with the next course of action in response.
Goldman Sachs said the tariffs announced Wednesday came in around 3% higher than the bank had forecast, and warned that possible “additional sectoral tariffs” could be in the pipeline.
Speaking to Bloomberg, Commerce Secretary Howard Lutnick said that countries will need to address a host of policies that limit American imports if they are hoping to secure relief from the tariffs. “These non-tariff trade barriers, they are the monster that needs to be slayed…It is time for them to do deep soul searching on how they treat us poorly and how to make it right.”
Data published by the Bureau of Economic Analysis on Thursday revealed that the US trade deficit reached USD122.7 billion in February, the second largest on record, as companies continued to frontload imports ahead of the expected impact of tariffs.
US jobless claims also reached their highest level since November 2021, with continuing claims (a gauge for people receiving benefits) increased to 1.9 million in the week ending March 22, edging above forecasts of 1.87 million. Initial claims dropped slightly last week, to 219,000.
The sources: Bloomberg, Financial Times, Wall Street Journal
