Wall Street just had its worst week since 2020 — and you can thank tariffs for that.
President Donald Trump’s “Liberation Day” tariffs, unveiled in early April 2025, were aimed at narrowing the U.S. trade deficit. But instead, they sent shockwaves through global markets. The result? A historic market sell-off that erased trillions of dollars in value and triggered deep anxiety among investors.
$3.1 Trillion Gone in a Flash
The damage was swift. On April 3, the Dow Jones Industrial Average sank 1,679 points — a 4% drop that marked its worst day in five years. The S&P 500 fell 4.84%, and the tech-heavy Nasdaq shed nearly 6%. Altogether, around $3.1 trillion in market value vanished in a single day.
Big names led the slide. Apple dropped more than 9% as concerns over supply chain costs grew. Nike took an even bigger hit, plunging over 14%. These weren’t just isolated drops — they were a sign of broad-based market fear.
Wall Street’s New Worry: Stagflation
Economists didn’t mince words. JPMorgan quickly raised its odds of a U.S. recession by year-end from 40% to 60%. Goldman Sachs warned the tariffs could tack on two full percentage points to inflation.
That double whammy — rising prices and slowing growth — has a name: stagflation. And for markets, it’s a nightmare scenario.
“Markets can handle inflation. They can handle slow growth. What they can’t handle is both — at the same time,” one strategist told Business Insider.
Sectors Feeling the Pain
Some industries are taking the hit harder than others:
- Tech: Apple, Nvidia, and other chipmakers are exposed due to heavy reliance on Chinese manufacturing and demand. Their stocks slid sharply.
- Manufacturing: Higher input costs are squeezing margins. Some firms are already scaling back production and trimming staff.
- Agriculture: Farmers are being hit by retaliatory tariffs, closing off key export markets and lowering incomes.
This Isn’t the First Time
Flashbacks to 2018–2019 are hard to ignore. Back then, Trump’s trade war with China roiled markets and dented investor confidence. The S&P 500 fell 4.38% in 2018 before bouncing back in 2019 after a Phase I deal was struck.
But this time feels different. The scale of these new tariffs — paired with inflation that’s already sticky — makes the risk of long-lasting damage more real.
What Investors Should Do Now
Financial advisers are urging calm. Knee-jerk reactions to volatility can be costly. Instead, they recommend sticking to diversified portfolios and long-term strategies.
“The worst thing you can do is sell at the bottom,” said one advisor. “This too shall pass — but only for those who stay invested.”
The Bottom Line
Trump’s tariffs may have been designed to strengthen the U.S. economy — but they’ve done the opposite for investors, at least in the short term. With recession risks rising and market nerves fraying, the only thing certain now is uncertainty.
Marc has been involved in the Stock Market Media Industry for the last +5 years. After obtaining a college degree in engineering in France, he moved to Canada, where he created Money,eh?, a personal finance website.
