The U.S. stock market has seen one of its sharpest declines in years after President Donald Trump announced sweeping tariffs on imports. This move has heightened fears of a looming recession, triggering a sell-off that wiped trillions of dollars from major indices.
On Thursday, April 3, 2025, the Dow Jones Industrial Average dropped by 1,679 points, marking a 3.98% fall to close at 40,545.93. It was the Dow's worst weekly performance since September 2024, with losses now totaling 3.25% for the week. The S&P 500 also fell sharply, shedding 4.84% to settle at 5,396.52 and erasing $2.5 trillion in market value. Meanwhile, the Nasdaq Composite plunged by 5.97%, closing at 16,550.61 and posting its worst weekly loss in seven months at 6.26%25.
Trump’s tariffs target nearly all imports into the United States, sparking concerns about retaliatory trade measures and their ripple effects on global economic stability. Economists warn that these policies could push the U.S. into a recession by year-end. JPMorgan has increased its recession probability forecast to 60%, up from an earlier estimate of 40%. The tariffs are expected to add $660 billion in annual costs for Americans and could push inflation up by two percentage points.
Investor fears were evident as Wall Street’s fear gauge—the Cboe Volatility Index (VIX)—spiked by 30%, reaching its highest level since August 2024. This surge signals heightened uncertainty across financial markets.
While most sectors faced steep losses, defensive stocks provided some relief for investors seeking stability amidst the chaos. Consumer staples and utilities emerged as bright spots during the week. Companies like Lamb Weston, Dollar General, and Kroger posted gains of up to 10%, supported by strong earnings and steady dividends. Utilities stocks such as Exelon Corporation and Duke Energy also rose as investors shifted toward safer options.
However, the broader market downturn spared few sectors or companies. Apple shares fell by 8%, while Nike dropped nearly 10%. Both were hit hard due to their reliance on international supply chains now threatened by tariffs. Retail giant Best Buy suffered a staggering 15% decline as rising costs weighed heavily on consumer-focused stocks.
GameStop offered a brief moment of optimism in after-hours trading with a modest rebound of nearly 3%. The rise followed news that CEO Ryan Cohen had increased his stake in the company. Despite this development, GameStop remains down over 32% this year as meme stocks face broader market challenges.
As uncertainty clouds Wall Street’s outlook, analysts warn that further turbulence may lie ahead. Investors are bracing for more volatility as they await clarity on trade policies and their long-term effects on global economic stability.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.