Major Indexes Continue Steep Decline Following Tariff Announcement
U.S. stock markets extended their dramatic sell-off on Friday, April 4, 2025, as investors continued to react to President Donald Trump’s sweeping new tariff plan announced earlier this week. The market turmoil, which began Thursday with the worst trading day since 2020, showed little sign of abating as global markets reeled from fears of an escalating trade war and potential recession.
The S&P 500 fell 2.81% in futures trading, pointing to further losses after Thursday’s 4.8% plunge that brought the index to 5,396.52.
Trump’s “Reciprocal Tariffs” Spark Global Market Chaos
The market turmoil stems from President Trump’s Wednesday announcement of sweeping global tariffs, starting from a minimum base rate of 10% and rising significantly for many countries. The tariffs are calculated based on each country’s trade surplus with the U.S., with China facing a particularly steep 34% tariff.
Global markets have responded with similar declines. The Stoxx Europe 600 index fell more than 2%, while Japan’s Nikkei and Hong Kong’s Hang Seng closed down 2.8% and 1.5%, respectively. Adding to market concerns, China announced it would impose 34% retaliatory tariffs on U.S. imports starting April 10.
Tech Stocks Bear the Brunt of Selling Pressure
Technology companies, particularly those with significant international exposure, have been hit especially hard by the tariff news. NVIDIA (NVDA) shares dropped 7.81% to $101.80, continuing their decline from Thursday’s session.
Bank of America analyst Wamsi Mohan cut his price target on Apple from $265 to $250, warning that all Apple products could be subject to tariffs. This could potentially reduce the company’s profits by $20 billion, shrink gross margins by 5 percentage points, and result in an estimated earnings hit of $1.24 per share in 2026.
Other tech giants facing pressure include Meta Platforms (META) and Alphabet (GOOGL), with analysts at Oppenheimer estimating that tariffs and resulting economic weakness could impact 16% of Meta’s revenue and 15% of Alphabet’s.
Some Bright Spots Amid Market Turbulence
Despite the broad market decline, a few stocks managed to post gains. The Goodyear Tire & Rubber Company (GT) led gainers with an 11.73% increase to $10.19, while Lamb Weston Holdings (LW) rose 10.01% to $59.57.
Upcoming Earnings and Economic Events
As markets navigate this volatile period, investors are looking ahead to upcoming earnings reports that could provide insight into corporate health amid growing economic concerns. The Cigna Group (CI) announced it will release its first quarter 2025 financial results on Friday, May 2, 2025, with a conference call scheduled for 8:30 a.m. ET that day.
Several companies reported earnings on Thursday, April 3, including ConAgra Brands (CAG), Acuity Inc. (AYI), Lamb Weston Holdings (LW), MSC Industrial Direct Company (MSM), and Lindsay Corporation (LNN).
Market Outlook and Investor Concerns
The market’s steep decline reflects growing investor concerns about the potential economic impact of Trump’s tariff policy. Many economists have questioned the validity of Trump’s tariff calculations and warned about the potential for inflation, supply chain disruptions, and retaliatory measures from trading partners.
With China already announcing reciprocal tariffs and other nations likely to follow suit, investors fear an escalating trade war that could derail global economic growth. The Russell 2000 index of smaller companies, which fell 6.6% on Thursday to 1,910.55, is now down 14.3% for the year, highlighting concerns about the broader economic impact beyond large-cap stocks.
As markets close out a tumultuous week, investors will be closely monitoring developments in trade policy, corporate earnings, and economic indicators for signs of whether this correction will deepen into a more prolonged downturn or stabilize in the coming sessions.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.