US stock index suffers biggest one-day fall since 2020 as Trump insists 'markets are going to boom'

WALL STREET LED a global markets bloodbath today as traders reacted to Donald Trump’s sweeping tariff announcement, with the broad-based S&P 500 recording its biggest one-day decline in almost five years.

The widely watched Wall Street index, which tracks the stock performance of the 500 largest publicly traded companies in the US, closed down 4.8% at 5,396.52 – its worst trading day since June 2020.

The tech-rich Nasdaq Composite tanked 6.0% to 16,550.60, while the Dow Jones Industrial Average ended the day down 4.0% at 40,545.93.

Shock waves also tore through markets in Asia and Europe a day after Trump’s announcement, while foreign leaders signaled readiness to negotiate but also threatened counter-tariffs.

Despite this, the White House insisted the US economy will emerge victorious.

Trump slapped 10% import duties on all nations and far higher levies on imports from dozens of specific countries, including 20% for the European Union and 35% on China.

Separate tariffs of 25% on all foreign-made cars also went into effect today, with Canada responding swiftly by imposing a similar levy on US imports.

In a sign of the real-world impacts expected to become common, Stellantis -the owner of Jeep, Chrysler and Fiat – paused production at some Canadian and Mexican assembly plants.

Trump dismissed the turmoil today, saying: “It’s what is expected.”

“The patient was very sick. The economy had a lot of problems.”

“It went through an operation. It’s going to be a booming economy. It’s going to be amazing.”

Advertisement

‘Trust Donald Trump’

The 78-year-old wants to make the United States free from reliance on foreign manufacturers, hoping his suite of tariffs will encourage the US’s domestic industry. 

In a post on his Truth Social platform this afternoon, he likened his trade policy declaration to a painful medical procedure.

“THE OPERATION IS OVER! THE PATIENT LIVED,” he wrote with his trademark use of all-caps.

“THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE.”

Amid howls of protest abroad and from even some of Trump’s Republicans, Commerce Secretary Howard Lutnick called for patience.

“Let Donald Trump run the global economy. He knows what he’s doing,” he told CNN. “You’ve got to trust Donald Trump in the White House.”

But China demanded that the tariffs be immediately canceled and vowed countermeasures, while France and Germany warned that the EU could hit back at US tech firms.

French President Emmanuel Macron called for suspending investment in the US until what he called the “brutal” new tariffs had been “clarified.”

Taoiseach Micheál Martin today insisted that Ireland and the EU will “weather the storm”, but said they will have an adverse impact, adding that the next step will be negotiations. 

That potential adverse impact was likened to the Great Depression by Public Expenditure Minister Jack Chambers. 

The 27-nation EU and other countries showed willingness to negotiate as they refrained from immediate retaliatory measures, with almost a week until the harsher US levies actually take effect.

Beijing said it was “maintaining communication” with Washington over trade issues, and EU trade chief Maroš Šefčovič planned to speak with US counterparts tomorrow.

Related Reads

The last time tariffs like this were imposed it led to the Great Depression, ministers warn

'Liberation Day' and its fallout: Trump thrives on the uncertainty and chaos he's created

Will Ireland get caught in the crossfire of the EU's response to Trump's tariffs?

However, Brazil’s president vowed to take “all appropriate measures.”

Gold – a safe-haven investment – hit a new record prices, oil fell and the dollar slumped against other major currencies.

The head of the World Trade Organization, which helps manage global trading, warned the upheaval may lead to contraction of “one percent in global merchandise trade volumes this year.”

Global economic ‘sumo wrestler’

Trump has brushed off warnings about triggering a global economic slowdown and politically damaging price rises at home.

Republican Senator Mitch McConnell today broke ranks with Trump, slamming tariffs as “bad policy.”

“Preserving the long-term prosperity of American industry and workers requires working with our allies, not against them,” he said.

But while Trump is under pressure to avoid a drawn-out trade war, he appears determined to stick with the tariffs until he forces competitors to play by US rules.

White House spokeswoman Karoline Leavitt told CNN that Trump made it clear that “this is not a negotiation.”

Lutnick also struck a hard line, saying: “You can’t really fight with the United States.”

“You fight… the greatest customer in the world, you’re going to lose. We are the sumo wrestler of this world,” he said.

With reporting from © AFP 2025

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.
Learn More Support The Journal