US stocks plummet as tariffs wreak havoc

The U.S. stock markets are taking a beating just one day after President Donald Trump officially unveiled his “Liberation Day” tariff plan, which imposes a sweeping 10% baseline tariff on all imports — alongside targeted levies on goods from more than 50 countries. 

By 11.52am, the S&P 500 was down 4%, while the Nasdaq 100 Index shed 4.4% and the Dow Jones Industrial Average was down 2.76%. US banks were hit hard as the KBW Bank Index plunged as much as 9.1%, its worst performance since the March 2023 banking crisis. Citigroup, Bank of America, and Morgan Stanley each fell over 10%, while JPMorgan lost $50 billion in market cap, sliding 7.5%. 

Sector fallout: consumer, semis, industrials hit hard 

Consumer discretionary and industrial stocks came under pressure as cost assumptions deteriorated. Starbucks dropped nearly 7%, Chipotle fell 4%, and both Lululemon and Nike slid 12% amid fears of supply chain disruption and higher import costs. 

Semiconductors and industrials led broader tech-sector weakness. The Philadelphia Semiconductor Index dropped more than 6%, with Micron Technology down 11% and Broadcom off 7%. 

Meanwhile, Apple led declines among the Magnificent Seven, erasing roughly $275 billion in combined market value. The group — including Tesla, Microsoft, Nvidia, Alphabet, Amazon, and Meta Platforms — has been responsible for much of the S&P 500’s gains over the past two years, making Thursday’s reversal a significant drag on major benchmarks and passive strategies.

As of midday Thursday, around $2 trillion in market cap has been erased from the S&P 500 Index. Investors are rotating defensively, but liquidity strains are beginning to surface in leveraged sectors.  

Global responses are also mounting with the European Commission confirming it is preparing reciprocal tariffs. Germany’s economic minister labeled the plan “Inflation Day,” while equity strategists warn of a prolonged shift in international trade policy that could weigh on EPS growth forecasts globally. 

Uncertainty heightened

While some investors had repositioned into high beta names during Wednesday’s relief rally, the market’s reversal underscores fragility 

“We’re taking more of a two-pronged approach,” said Jacob Turner, Partner at Moment Private Wealth. “First, we’re evaluating whether our portfolios are structured to weather shocks like these. And second, we’re in wait-and-see mode—because right now, most of the analysis is surface level.” 

Turner noted that while higher consumer prices are an expected first-order effect, the long-term economic consequences are murkier. “The second-level effects of these tariffs are what we’re really watching. We haven’t had trade measures like this in decades, and that makes it tough to predict how this will play out across sectors and global markets.” 

He emphasized the importance of staying nimble: “This is a new reality. Our job is to adapt—not panic.”