Markets around the world tumbled on Thursday after President Trump announced across-the-board tariffs on America’s main trading partners, including the European Union and Japan.
Futures on the S&P 500, which allow investors to trade the index outside normal trading hours, slumped more than 3 percent. Asian and European stock markets fell sharply, with benchmark indexes dropping more than 3 percent in Japan, and nearly 2 percent in Hong Kong, South Korea, Germany and France.
The value of the U.S. dollar against a basket of other major currencies dropped more than 1 percent.
The slide came after Mr. Trump, speaking at a ceremony at the White House on Wednesday, announced a new 10 percent base line tariff on all imports as well as country-specific taxes on goods from a host of other countries. Those included an additional 34 percent tax on Chinese imports, on top of 20 percent in tariffs he recently put on China, and 20 percent on goods coming from the European Union and 24 percent on Japanese imports.
The market reaction suggested that the scale of the tariffs on Wednesday had come as a surprise, and there was confusion about how the figures had been derived.
“The numbers are shockingly high compared to what people were expecting and it is inexplicable in many ways,” said Peter Tchir, head of macro strategy at Academy Securities. “I think it’s a disaster.”
The Trump administration had modified its estimates of the tariffs imposed on the United States to include adjustments for what it deemed currency manipulation or even other taxes, with analysts questioning the analytical basis for doing so.
“Trump is going to war with countries on this,” said Andrew Brenner, head of international fixed income at National Alliance Securities. “It’s ridiculous. It shows no comprehension as to what he is doing to other countries. And it is going to hurt the U.S.”
Investors flocked to government debt as a haven. The yield on the 10-year U.S. Treasury bond, which moves inversely to prices, fell to 4.08 percent, the lowest since October.
The prospect of weaker global economic growth also weighed on commodities, with Brent crude oil, the international benchmark, dropping 4 percent to around $71.90 a barrel.
The Stoxx Europe 600 fell 1.7 percent on Thursday, with most sectors, including banks, technology and consumer goods, in the red.
Shares in consumer brands slumped as the Trump administration imposed steep tariffs on countries that are manufacturing hubs for shoes and clothing, for example a 46 percent tariff on Vietnam and 32 percent on Indonesia. Shares of Adidas and Puma each dropped about 9 percent in Frankfurt. The stock of Pandora, a Danish jewelry company that makes its products in Thailand, tumbled 12 percent. Nike’s shares dropped more than 8 percent in premarket trading in New York.
Shares in Maersk, the Danish shipping giant, fell 7 percent on fears of a global trade slowdown. Big European banks including HSBC, Commerzbank and Deutsche Bank dropped more than 4 percent.
Stock markets globally have been choppy in recent weeks, as investors have been whipsawed by the administration’s mixed messages on tariffs. Mr. Trump has previously announced, delayed, changed and ultimately imposed tariffs on Canada, Mexico, steel, aluminum, cars and auto parts.
Japan’s Nikkei 225 fell into a correction on Monday and was jolted again on Thursday, with analysts and trade experts in Tokyo caught off guard by Mr. Trump’s announcement of a 24 percent tariff on Japanese products. A number of business executives in Tokyo had earlier said they were optimistic that Japan’s low average tariff rate might help save it from high tariffs.
The uncertainty around the tariff levels, and how long they might last, has made it difficult for investors, economists and policymakers to assess the potential ramifications for consumers, businesses and the broader economy.
The U.S. tariff rate on all imports is now around 22 percent, from 2.5 percent in 2024, said Olu Sonola, the head of U.S. economic research at Fitch Ratings. That rate was last seen around 1910, he said.
Through Wednesday, the S&P 500 had fallen 7.7 percent below its most recent peak in February. The Nasdaq Composite index, which is chock-full of the tech stocks, was down almost 13 percent since its peak in December. In premarket U.S. trading, tech stocks were among the biggest losers. Shares in Apple were down more than 6 percent, Amazon was down nearly 5 percent and shares in Nvidia and Palantir dropped about 3 percent each.
In Asia, the stocks tumbled for a wide range of companies including technology and semiconductor giants, as well as major auto exporters. Shares of Japanese automaker Toyota fell more than 5 percent on Thursday, while South Korea’s Samsung Electronics fell close to 3 percent.
Signs of worry have also been evident in the rapid rise in the price of gold. Investors have flocked to the precious metal, sending it 19 percent higher in the first three months of the year, its biggest quarterly rise since 1986. On Thursday, gold was trading at over $3,100 per troy ounce.
Although many investors worry about the inflationary effect of tariffs, falling bond yields and a declining U.S. dollar suggest that most are more worried about waning economic growth.
The dollar slid as Mr. Trump spoke from the White House Rose Garden. On Thursday, an index that tracks the dollar against other major currencies fell 1.1 percent, the worst day in more than a month.
Some investors had hoped that the tariff announcement on Wednesday would cure some of the uncertainty in the financial markets. But few truly expected the news to be the end of Mr. Trump’s tariff talk and with it an end to the stock market volatility.
“Investors no longer see tariffs as a one-time event risk, but an always-present risk,” said Mandy Xu, head of derivatives market intelligence at Cboe Global Markets, adding that the current expectation in the market is for volatility to persist.
