Trump's Tariffs Spark 1.1% S&P 500 Drop, 2% Nasdaq Decline

President Trump's announcement of new tariffs on automobile imports sent ripples through the U.S. stock market, resulting in a notable decline in both U.S. stocks and the crypto market. The S&P 500 and Nasdaq Composite experienced significant drops, with the S&P 500 falling by more than 1.1% and the Nasdaq Composite declining by 2%. The Dow Jones Industrial Average also slipped by 0.3%. This downturn followed a three-day winning streak, which had been driven by optimism about the potential impact of tariffs and the outlook for the U.S. economy.

The White House confirmed that President Trump would announce tariffs on automobile imports after markets closed, preceding the imposition of wide-ranging reciprocal tariffs on U.S. trading partners. This announcement heightened investor concerns about the potential economic impact and the possibility of a recession. The economic calendar was relatively light on Wednesday but was expected to pick up in the coming days, adding to the uncertainty.

Major technology companies, which had been driving the recent market rally, saw their shares decline across the board. Tesla, which had been on a five-day winning streak, slid by more than 5%. Nvidia, another tech giant, also experienced a significant drop. Other notable decliners included Apple, Microsoft, Alphabet, Amazon, Meta Platforms, and Broadcom. Among the tech movers, shares of Super Micro Computer and Vistra, two AI investor favorites, were among the S&P 500's biggest decliners.

The crypto market also felt the impact of the tariff news, with Bitcoin dropping from an overnight high of $88,600 to $87,200. Gold futures held steady at around $3,025 an ounce, while West Texas Intermediate futures, the U.S. crude oil benchmark, rose by 1.4% to $70 per barrel. The yield on the 10-year Treasury note, which affects borrowing costs on various loans, rose to 4.36% from 4.31% at Tuesday's close, trading near its highest level in more than a month.

The decline in the stock market was led by major technology companies, with shares of Nvidia and Tesla experiencing significant drops. The announcement of tariffs on automobile imports by President Trump added to investor concerns about the potential economic impact and the possibility of a recession. The economic calendar was relatively light on Wednesday but was expected to pick up in the coming days, adding to the uncertainty.