U.S. Stocks Plunge 10.5% as Tariffs Trigger $5.4 Trillion Loss

The U.S. stock market experienced a significant downturn over two days, with the S&P 500 index plummeting by 10.5% and the Nasdaq Composite index falling by 11.4%, marking its entry into a bear market. This decline resulted in a staggering $5.4 trillion in market capitalization being wiped out. The wealth of the world's top 500 richest individuals also took a hit, with a collective loss of $32.9 billion on Friday alone, marking the most severe single-day wealth decline since the onset of the COVID-19 pandemic.

The market turmoil was triggered by the announcement of new tariffs, which sent shockwaves through global markets. The S&P 500 index reached an 11-month low, and the cumulative decline from its February peak exceeded 17%. The wealth of the world's top 500 richest individuals decreased by $53.6 billion over the two-day period, with nearly 90% of these individuals experiencing a reduction in their net worth. The average decline in wealth was 3.5%.

Elon Musk, the CEO of Tesla, was among the hardest hit, with his net worth shrinking by $31 billion due to a more than 10% drop in Tesla's stock price on Friday. Musk's total losses for the year amounted to $13 billion. Meta's founder, Mark Zuckerberg, also suffered significant losses, with a two-day decline of $27 billion. Carvana's CEO, Ernest Garcia III, saw his wealth decrease by $20 billion, causing him to drop out of the top 500 richest individuals.

Phil Knight, the founder of Nike, was one of the few winners on Friday. Following a statement from the administration about a productive conversation with Vietnamese leaders and the potential cancellation of recently announced tariffs on Vietnam, Nike's stock price rose by 2.8%. This increase added $84 million to Knight's net worth, offsetting his $30 billion loss from the previous day. Conversely, Carlos Slim, the telecom mogul, initially saw a slight increase in his assets due to Mexico's exclusion from the initial tariff list. However, a 4.9% drop in the Mexican stock market on Friday resulted in a $5.5 billion loss for Slim.

The impact of the tariffs was not limited to the stock market. The wealth of the world's top 500 richest individuals was significantly affected, with a collective loss of $32.9 billion on Friday. This marked the largest single-day decline in wealth since the peak of the COVID-19 pandemic in 2020. The average decline in wealth was 3.5%, with nearly 90% of these individuals experiencing a reduction in their net worth.

The tariffs are expected to have a significant impact on the U.S. technology hardware industry, with an estimated additional cost of $51 billion. Apple, in particular, is expected to face an additional $33.3 billion in tariff costs. Dell and HP are also expected to be severely affected, with tariff costs potentially equaling their expected net profits for 2025.