US Stocks Plunge 4% as Trump's Tariffs Spark Global Sell-Off

US stocks experienced a significant decline on Thursday, with the S&P 500 Index falling by 4%. The Dow Jones Industrial Average also saw a substantial drop, tumbling by approximately 3%. The tech-heavy Nasdaq Composite led the sell-off, plummeting over 4%. This market turmoil was triggered by President Trump's announcement of steep "Liberation Day" tariffs, which sent shockwaves through global markets.

The tariffs, which impose a baseline rate of 10% on all US trading partners and additional duties on countries deemed "bad actors" on trade, are set to go into effect on April 5 and April 9. These new duties have raised the effective US tariff rate to its highest level in over a century, impacting 185 countries. The announcement has fueled fears of a full-blown trade war and a severe hit to global growth, leading to a sell-off in stocks worldwide.

Among the hardest-hit sectors were megacap tech companies. Apple shares fell over 8% due to concerns about disruptions to its supply chain, as China, a key source of iPhone components, was hit with additional US tariffs. Nvidia and other chip stocks also tumbled due to similar concerns. Retailers such as Walmart, Target, and Nike also saw their shares fall, with risks to supply from Asian manufacturing hubs in focus.

The market's reaction to the tariffs was swift and severe. The likelihood of retaliation from trading partners has exacerbated fears of a trade war, leading to a broad sell-off in stocks. The impact was not limited to the US; global markets also felt the effects. The pan-European benchmark Stoxx 600 sank over 2%, while Japan's Nikkei 225 slumped 2.7% to its lowest level since August.

The market's decline can be attributed to the uncertainty and potential disruption caused by the tariffs. Investors are concerned about the impact on global supply chains, the potential for retaliation from trading partners, and the overall effect on economic growth. The tech sector, in particular, has been hit hard due to its reliance on global supply chains and the potential for increased costs and disruptions.

The market's reaction to the tariffs highlights the sensitivity of global markets to geopolitical risks. The announcement of the tariffs has created a sense of uncertainty and volatility, leading to a broad sell-off in stocks. Investors are now looking to the future with caution, as the potential for further escalation in the trade war remains a significant risk. The market's decline serves as a reminder of the interconnected nature of global economies and the potential for geopolitical risks to have far-reaching effects.