U.S. stocks had another chaotic day, with early gains reversing after President Donald Trump announced major new tariffs on nearly all of America’s trading partners—an action that could significantly change the global economy.
The S&P 500 went up 0.7% during the regular trading session on Wednesday. The Dow Jones Industrial Average gained 235 points, or 0.6%, and the Nasdaq composite rose by 0.9%. However, futures markets showed that all three indexes were set to fall sharply on Thursday, with the S&P 500 down 3.6% and the Nasdaq expected to drop 4.5%.
Markets around the world have been unstable recently due to concerns over Trump’s trade policies. He says the tariffs are meant to make the system fairer and bring manufacturing jobs back to the U.S. from overseas. But these tariffs might slow down growth in the U.S. and other countries, and they could make inflation worse, especially while it remains above the Federal Reserve’s 2% goal.
Earlier this week, some investors were hopeful that the uncertainty around tariffs might be easing, which helped boost the U.S. stock market. Those hopes were crushed late Wednesday when Trump announced a 10% minimum tax on imports from all countries, along with higher tariffs on several nations that have trade surpluses with the U.S.
During his announcement at the White House, Trump showed a chart that detailed the new tariffs: 34% on Chinese imports, 20% on imports from the European Union, 25% on South Korea, 24% on Japan, and 32% on Taiwan. These taxes add to earlier ones, including 25% tariffs on auto imports and extra trade penalties on steel, aluminum, and goods from China, Canada, and Mexico.
Some companies saw their stock prices drop in after-hours trading. Lululemon fell by 11%, Williams-Sonoma dropped 10%, and Deckers Outdoor, the company behind Uggs, lost 9%.
Major tech companies were hit too. Apple’s stock dropped 7.4%, Amazon fell 6.1%, and Nvidia was down 5.2%.
Tesla’s stock also fell 7.3% after trading hours. The electric car maker had a rough session, first dropping over 6% in the morning after news came out that it delivered fewer vehicles in the first quarter than it did a year ago.
NYSE BuildingThat decline was partly tied to backlash over Elon Musk’s cost-cutting measures in line with Trump’s policies. However, the stock recovered and ended the day up 5.3% after a Politico report said Trump has privately mentioned that Musk will soon reduce his involvement with the government.
A few stocks went up after-hours. Norfolk Southern, a railroad company, rose 4.7%, and spice company McCormick & Co. climbed 2.6%.
Even before Trump officially gave the details of the tariffs, markets were already on edge. Investors were worried that the unpredictable way these tariffs were being announced might scare households and businesses into cutting back on spending, which would hurt the economy.
Surveys have shown people are becoming more negative about the economy, but economists are waiting to see if that leads to real economic problems. A report released Wednesday suggested that the U.S. job market may still be stronger than many expected.
According to ADP Research, private employers hired more workers last month than economists thought they would. This could be a good sign ahead of Friday’s broader jobs report from the government, though economists believe that hiring slowed in March compared to February.
The strength of the job market has been one of the key reasons the U.S. hasn’t fallen into a recession.
In the bond market, Treasury yields bounced around, showing the same kind of uncertainty as the stock market. The yield on the 10-year Treasury fell to 4.12%, down from 4.18% earlier.
By the end of the regular trading session, the S&P 500 had risen by 37.90 points to 5,670.97. The Dow Jones Industrial Average increased by 235.36 points to 42,225.32, and the Nasdaq composite went up by 151.16 points to reach 17,601.05.
