Dow Plunges 1,204 as Trump Tariff Sparks Global Sell-off/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The Dow Jones dropped over 1,204 points Thursday as global markets reacted sharply to President Trump’s sweeping new tariffs. Investors fear the measures could ignite stagflation, disrupt trade, and push the U.S. economy into a recession. Markets across Europe and Asia also suffered significant losses.
Market Collapse After Tariffs – Quick Looks
- Dow drops 1,204 points; S&P 500 falls 3.3%
- Nasdaq tumbles 4.5%, led by tech stock losses
- Global markets plunge following Trump’s sweeping tariffs
- Trump announces minimum 10% tariffs on all imports
- Higher tariffs target China and the European Union
- UBS warns tariffs could slash U.S. growth by 2%
- Inflation fears rise; UBS forecasts rate near 5%
- Investors fear prolonged stagflation with slowing growth
- Fed may face limits on interest rate cuts
- Nike, Nvidia, United Airlines among biggest losers
- Gold and crude oil prices also fall
- Japan, France, Germany, and Hong Kong markets decline
Dow Plunges 1,100 as Trump Tariff Sparks Global Sell-off
Deep Look
Dow Plunges 1,100 Points as Global Sell-Off Follows Trump’s Tariff Bombshell
Wall Street nosedived Thursday, leading a global market retreat triggered by President Donald Trump’s sweeping new tariffs on imports. The Dow Jones Industrial Average sank 1,204 points in early trading, while the S&P 500 dropped 3.3%, and the Nasdaq suffered a 4.5% loss—marking one of the worst trading sessions of the year.
The stock market rout followed Trump’s Wednesday evening announcement of new tariffs—starting at 10% on all imports, and significantly higher on goods from China and the European Union. Investors had been bracing for tariffs, but few expected the breadth or severity of the measures.
Markets Brace for Stagflation Shock
The aggressive trade action sparked fears of a rare and dangerous economic scenario: stagflation, where inflation rises while growth slows.
“This could knock 2 percentage points off U.S. growth and push inflation near 5%,” warned analysts at UBS. The firm’s strategists said Trump’s move represented the “worst-case scenario” for trade policy.
Prices fell broadly—across sectors, commodities, and even safe havens like gold—as investor confidence evaporated. The U.S. dollar dropped against major global currencies, and Treasury yields plummeted as traders sought safety in government bonds.
The yield on the 10-year Treasury fell sharply to 4.03%, down from 4.20% the day prior and from 4.80% in January—a massive move for bond markets that signals deep concern about the economy’s trajectory.
From Negotiation Tool to Ideological Policy
Trump’s earlier tariffs had been widely seen as tactical—a bargaining chip in trade negotiations. But the scale of the latest announcement suggests a shift toward a longer-term policy aimed at reshaping global trade and reviving domestic manufacturing.
“Markets may actually be underreacting,” said Sean Sun, a portfolio manager at Thornburg Investment Management. “If these rates stick, the ripple effects on global consumption and trade could be profound.”
Fed Faces Tightrope as Recession Fears Mount
Normally, the Federal Reserve could respond to slowing growth by cutting interest rates. But inflationary pressure from tariffs complicates the picture. Rate cuts might stoke inflation further, leaving the Fed with few tools to combat the growing threat of stagflation.
“There’s no easy fix for what we’re looking at,” analysts at UBS noted. “The Fed’s hands may be tied.”
Tech, Travel, and Retail Hit Hard
Losses rippled across nearly every industry, with three out of four S&P 500 stocks in the red.
Nike dropped 10.7%, facing pressure due to its global supply chain. United Airlines slid 9.2% amid fears that economic uncertainty will hit business and leisure travel. Dollar Tree plunged 11.3%, a worrying sign that consumer confidence may be cracking.
Tech stocks, especially those tied to the artificial intelligence boom, suffered steep losses after years of soaring gains. Nvidia fell 5.1%, extending its 2025 decline to 22% after massive rallies in 2023 and 2024. Palantir Technologies dropped 4.1%, and Super Micro Computer fell 8.2%.
Global Impact Spreads Across Asia and Europe
The U.S. wasn’t alone. Markets around the globe saw deep losses as the tariff shock reverberated:
- France’s CAC 40 fell 3.1%
- Germany’s DAX dropped 2.4%
- Japan’s Nikkei 225 slid 2.8%
- Hong Kong’s Hang Seng declined 1.5%
- South Korea’s Kospi edged down 0.8%
From Big Tech to real estate and energy, no sector was spared. Even gold, which typically rises during uncertainty, fell on Thursday.
Next Steps and Outlook
While some investors view the tariff move as an opening gambit in a broader negotiation strategy, market volatility could worsen if it becomes clear that these measures are permanent.
The second half of the year could be shaped by whether the Trump administration offers flexibility, whether trading partners retaliate, and how the Federal Reserve responds.
For now, though, the message is clear: investors are rattled, and the global economy may be heading toward a turbulent new chapter.
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