On Thursday morning, the Dow Jones Industrial Average dropped 1,500 points, or 3.54%. The Nasdaq fell 850 points, or 4.83%, and the S&P 500 lost 220 points, or 3.89%. This sharp drop came after a global trend of falling stock markets.
Before the market opened, President Trump defended his new tariffs on social media. He compared them to a medical procedure, writing, “THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!!!”
Commerce Secretary Howard Lutnick also spoke on CNBC, saying the tariffs are meant to address trade imbalances and non-tariff trade barriers.
Stocks of major restaurant chains like Starbucks and Chipotle also dropped. These companies rely on imports, which could become more expensive due to the tariffs. Starbucks fell nearly 7%, and Chipotle dropped about 4%. Retailers like Lululemon and Nike also saw their stocks fall by around 12%, as they brace for possible supply chain issues.
The auto industry is feeling the effects too. Stellantis, the company that owns Jeep, Chrysler, and Dodge, announced it would halt production at its factories in Mexico and Canada. About 900 U.S. workers will be laid off as a result of a new 25% tariff on imported cars.
Sarah Ketterer, CEO of Causeway Capital Management, told the Wall Street Journal that investors are having a tough time navigating this situation. “I’m bewildered,” she said. “We’re sailing into some seriously uncharted waters.”
Many Americans are worried that these tariffs will hurt their retirement savings, especially baby boomers who are close to retirement. Peter Ricchiuti, a professor at Tulane University, said, “For the small investor, the decline in value will be devastating.”
Senator Adam Schiff warned that Trump’s tariffs would “liberate Americans from being able to afford groceries,” and harm their savings and hopes of buying a home.
Global markets also took a hit. In Asia, Japan’s Nikkei index dropped 2.77%, and in Europe, the Stoxx 600 index fell 2.26%.
Trump announced on Wednesday that starting at midnight, Americans would pay at least a 10% “baseline tariff” on all imports. He said this would help rebuild the U.S. economy and prevent unfair trade practices.
Leaders of countries affected by the tariffs, like those in Europe, have already started preparing countermeasures. European Commission President Ursula von der Leyen called Trump’s decision a “major blow” to the global economy. She added that Europe would protect its businesses if talks fail. Germany’s economy minister, Robert Habeck, even referred to the tariffs as “inflation day.”
Business leaders in the U.S. have warned that the tariffs could hurt American families. Jay Timmons, CEO of the National Association of Manufacturers, said the tariffs could harm jobs, investments, and supply chains, which would hurt America’s ability to compete globally.
Andrew Brenner, a financial expert, called Trump’s actions “ridiculous” and said they could ultimately hurt the U.S.
Democratic leader Hakeem Jeffries criticized Trump’s tariffs, saying they would drive down the stock market and cause the retirement savings of everyday Americans to shrink. He added that the tariffs would raise the cost of goods, costing families thousands of dollars each year.
