Global Markets Plunge After U.S.Announces Broad Tariffs

JAKARTA,Indonesia – Global stock exchanges experienced a sharp downturn ‍Thursday,March 3,2025,following the United States’ declaration of new tariffs impacting numerous countries. ‍Wall Street suffered its most significant single-day decline as⁤ the early days of the COVID-19 pandemic in 2020.

The market sell-off was triggered by the U.S. President’s unveiling of tariffs on goods from approximately 180 countries. Investors fear these tariffs will escalate into a global trade war, perhaps destabilizing the global economy.

Wall⁣ Street reels

In U.S. trading, the S&P 500 plummeted 274.45 points, or 4.84%, ⁢to close at 5,396.52. The Dow Jones Industrial Average sank 1,679.39 points,a 3.98%⁣ drop, to finish at 40,545.93. The Nasdaq Composite fared even worse, declining 5.97% to end the day at 16,550.61. All three indices recorded their worst sessions sence June and March 2020, respectively.

The widespread decline affected nearly all sectors, with over 400 companies in the S&P 500 experiencing losses. The S&P 500’s performance marked its lowest level since before⁢ the U.S.‍ presidential election of November 5, 2024, and the⁤ index has now fallen 12% from its record closing high in February.

Tech and Retail Giants Hit Hard

Shares of multinational corporations were particularly affected.Nike shares fell by 14%, while Apple’s stock price decreased by‍ 9%. Companies reliant on imported goods experienced the most⁣ significant impact. Five below saw its stock price ‍plunge nearly 28%, Dollar Tree fell 13%, and GAP dropped 20%. Technology stocks also declined amid the risk-averse market ⁣sentiment, with Nvidia down almost 8% and Tesla more than 5%.

Details of the U.S. Tariff Policy

The U.S. ‍President announced a baseline tariff of 10% on goods from all countries, effective April 5. Higher tariffs⁢ will be imposed on countries that currently levy higher tariffs on U.S. goods, with those details ‍to be announced in the coming days.

The President likened the market reaction to the tariffs to “an operation, such ⁣as when a patient is operated on,” according to CNBC International.He predicted a subsequent market rebound, stating, “The market will surge. ⁢Stocks will surge. The state will surge. And the whole world wants to see if there‍ is a ‍way they can make an agreement.”

However, analysts caution that the tariffs’ long-term impact remains a concern. Mary Ann Bartels, Head of Investment Strategy at sanctuary Wealth, told CNBC ‍international that the market is reacting to the potential for significant risk, stating, “This ‍is the worst ⁣scenario for tariffs and [hal ini] Not yet taken into account market participants.”

Bartels added, “The big question is whether the S&P 500 can survive at the 5,500 level. If it cannot survive, we might see another decline of 5-10%, which can lead to ⁢the lowest level⁢ of 5,200-5,400.”

The market turmoil ⁣prompted investors to seek safer investments, driving down 10-year Treasury bond ⁤yields to as low ⁣as 4% as bond prices increased.

Economists at jpmorgan Chase & Co. suggest that a recession is increasingly likely if the new tariffs remain in place and are not renegotiated.

European and Asian Markets Follow Suit

The downturn extended beyond the U.S., impacting markets in Europe and Asia.

European Markets

European ‍stock exchanges experienced their ⁣worst day in eight months. The Stoxx Europe 600 index plummeted 2.6%, France’s CAC 40 fell 3.3%, Germany’s DAX weakened 3%, and Denmark’s OMXC25 declined‍ 2.4%.

European banks, previously a leading sector, suffered the most significant losses, declining 5.5%. The automotive industry also faced pressure, extending its year-to-date losses to 7.2% following the implementation of new U.S. tariffs on car imports.

France⁣ and ⁢Germany are reportedly considering more aggressive tariffs to strengthen the European Union’s negotiating position. The escalating trade war threatens to negate much of the economic expansion projected for the Eurozone by the European ⁤Central Bank for this year and next.

Kevin Thozet, a member of the Investment Committee at Carmignac in Paris, told Reuters, “The question ⁢is how fast this impact will be reflected in economic data.”

Concerns ⁢about the tariffs overshadowed previous positive sentiment driven by hopes of increased government spending in Germany, lower interest rates, and lower share valuations.

Asian Markets

In‍ Asia, Japan’s Nikkei stock exchange fell by 2.8%, reaching its lowest level in eight months.

Vietnam’s stock exchange experienced a particularly ⁢sharp decline due to the country facing a high tariff rate of 46%. As a major apparel manufacturing hub, Vietnam is expected ⁢to be significantly impacted by the new tariff policy.⁤ The VN Index collapsed 6.7%, ‍while the HNX fell 7.21%.

Foreign investors continued⁤ to sell shares, recording a net sell of VND 1.9 trillion (US $75.5 million), or approximately Rp 1.25 trillion (US ⁣$1 = Rp. 16,555). The total net sell for the first quarter reached 26 trillion VND (around US $1 billion).

Luu ⁤Chi Khang, Director of the Research Center at CSI Securities, attributed the market’s sharp reaction to the unexpected announcement of high tariffs by the U.S., particularly the 46% tariff on Vietnamese goods. He told Vietnam Net, ⁤”The United⁣ states is the largest export market for Vietnam, contributing up to⁢ 30% of the total value of the country’s exports. The 46% tariff will have a⁢ major impact on the domestic economy.This impact can last long unless Vietnam has successfully negotiated to reduce the tariff.”