President Donald Trump’s sweeping tariffs on foreign imports have sparked fears of a recession and wiped out over $2 trillion in U.S. stocks Thursday.
According to the Associated Press, U.S. financial markets closed with their largest one-day drops since the COVID-19 pandemic brought the global economy to a halt.
Economists have said the response to the tariffs has been worse than expected, with investors dumping stocks in companies expected to take the biggest hits, including banks, retailers, clothing, airlines, and technology companies.
The AP further reported that consumer spending makes up about 70% of economic activity in the U.S., and tariffs would mean higher tax on consumer goods, which economists fear will lead to more people scaling back their spending.
Olu Sonola, Fitch Ratings’ head of U.S. Economic Research said in a report that the tariffs will not only change the U.S. economy but will also affect the global economy too.
“This is a game changer, not only for the U.S. economy but for the global economy,” Sonola said. “Many countries will likely end up in a recession.”
Senior index analyst at S&P Dow Jones Indices, Howard Silverblatt said with a drop of 4.8% in the S&P 500, it equates to more than $2 trillion in value gone.
Stocks across airlines dropped significantly, with United Airlines dropping by 15.6%, American Airlines dropped10.2%, and Delta Air Lines dropped down by 10.7%.
Clothing and shoes took a hit, with Nike down 14.4%, Under Armour down 18.8%, Lululemon down 9.6%, Ralph Lauren down 16.3%, and Levi Strauss, down 13.7%.
Retailers who import most of their inventory from outside of the U.S., saw a significant decrease, with Target down 10.9%, Best Buy down 17.8%, Dollar Tree down 13.3%, and Kohl’s down 22.8%.
Technology companies selling computers, smartphones, and other technology who source materials or manufacture entire products outside of the U.S., would be subject to import tariffs once the product comes into the U.S., with Apple down 9.2%, HP down 14.7%, Dell down 19%, and Nvidia down 7.8%.
