Global Markets Tumble as Trump Tariffs Trigger $5 Trillion Stock Wipeout

Global stock markets continued to plunge on Friday, with investors reeling from U.S. President Donald Trump’s sweeping new tariffs, which have triggered the worst two-day sell-off in equities since the COVID-19 market crash in 2020. The S&P 500 alone has lost a staggering $5 trillion in market value since the tariff announcement on Wednesday.

The tech-heavy Nasdaq Composite confirmed it has entered a bear market, closing more than 20% below its all-time high. The Dow Jones Industrial Average and Europe’s STOXX 600 also confirmed correction territory, each falling over 10% from recent peaks.

Trump’s policy, which includes a 10% baseline tariff on most U.S. imports and even steeper levies on dozens of countries, marks the most aggressive protectionist move in over a century. Investor fears intensified after China responded with a retaliatory tariff of 34% on American goods, signaling the likelihood of a prolonged global trade war.

“This is the worst-case scenario for global trade. Investors who thought tariffs were just a negotiation tool are realizing this may be a deeper and more damaging policy shift,” said Rick Meckler, partner at Cherry Lane Investments.

The S&P 500 dropped 322.44 points (5.97%) to 5,074.08, while the Nasdaq fell 962.82 points (5.82%) to 15,587.79. The Dow lost over 2,200 points, falling 5.5% to 38,314.86. European markets were hit just as hard, with the STOXX 600 tumbling 5.1% — its worst day since the 2020 COVID sell-off.

Sectors with heavy exposure to China led the declines. Apple plunged 7.3%, chipmakers sank 7.6%, and bank and energy stocks slumped on recession fears. Oil prices also collapsed, with Brent crude falling 6.5% to $65.58 per barrel and U.S. crude dropping 7.4% to $61.99 — their lowest levels in over three years.

Volatility surged, with the Cboe VIX Index jumping to 45.31, its highest since April 2020. Meanwhile, safe-haven assets like government bonds saw sharp inflows. The yield on the 10-year U.S. Treasury fell to 3.933%, its lowest in six months, as investors fled to safety.

Despite stronger-than-expected U.S. job data for March, market sentiment remained grim. Federal Reserve Chair Jerome Powell warned that the scale of the new tariffs could result in higher inflation and slower growth, though he stopped short of forecasting a recession. Still, private-sector forecasts are shifting, with JPMorgan now assigning a 60% probability of a global recession by year-end.

Currency markets also reacted sharply. The dollar rebounded on Friday, gaining 0.7% against a basket of currencies, after a sharp fall on Thursday. The euro dropped 0.69% to $1.1097, while the dollar rose 0.58% against the yen to 146.9.

As uncertainty looms, investors are pulling back from risk. “In this environment, many are just saying, ‘Let’s go to cash and wait it out,’” Meckler added.