Tariff Big Stick Hits Stock Market, Market Fear Spreads, Dow Jones Plunges Nearly 1,700 Points.

The U.S. stock market plunged significantly after President Trump announced his latest tariff policy, spreading market panic and causing investors to reassess the market trends for the remainder of 2025. During the "Salute to America" event in the White House Rose Garden, Trump announced that all trading partners will be subject to a minimum 10% tariff, with additional "reciprocal tariffs" targeting "currency manipulation and trade barriers," which could exceed 10%. Specifically, the tariff rates for major U.S. trading partners exceed 10%: China, Japan, and the EU will face tariffs of 34%, 24%, and 20% respectively. Additionally, specific industry tariffs will remain the same, with automobiles and parts at 25% and steel and aluminum products at 25%. The market had not anticipated such harsh tariff levels, particularly the 34% tariff on Chinese goods, which means prices of products like the iPhone will increase substantially. As a result, the U.S. stock market experienced severe volatility. The S&P 500 ETF dropped 4.9% on Thursday, the "Big Seven" tech stocks ETF fell by 6.7%, the Dow Jones Industrial Average plummeted nearly 1,700 points, a 3.98% decrease. In terms of individual stocks, Apple Inc. (AAPL.US) saw a drop of over 9%, Meta (META.US), Amazon.com, Inc. (AMZN.US) nearly 9% decline, Alphabet (GOOG.US, GOOGL.US) down 3.9%, Microsoft Corporation (MSFT.US) nearly 2.4% decrease, NVIDIA Corporation (NVDA.US) down 7.8%, and Tesla, Inc. (TSLA.US) falling by 5.5%. The Nasdaq Composite Index closed down by 6%. Wedbush analyst Dan Ives said, "This series of tariff policies is even worse than the market's most pessimistic expectations." The Yale Budget Lab estimates that the effective tariff rate on overall imported goods in the U.S. will reach approximately 23%, nearly 10 percentage points higher than previously expected. This means the average American household could spend an extra $3,800 a year to cope with rising prices. Despite this, some market participants remain cautiously optimistic about future trends. Jason Browne, President of Alexis Investment Partners, believes that if the S&P 500 index breaks through the 5750-point mark, it would indicate that the market has passed the worst adjustment period. However, with the S&P 500 index already falling below the key support level of 5500 points, the future market still faces significant uncertainty. Barclays' U.S. equity strategy director Venu Krishna warned that besides tariffs, the market also needs to deal with a series of challenges including international trade retaliation, inflation, consumer spending, and industrial production uncertainty. He has lowered the earnings forecast for the S&P 500 index in 2025, from $271 per share to $262 per share, and warned that if the situation deteriorates further, it could completely erase the earnings growth for 2025. Although tech stocks have generally plummeted, Krishna still sees potential in this sector. He pointed out that the price-to-earnings ratios of Apple Inc., Amazon.com, Inc., Alphabet, Meta, Microsoft Corporation, and NVIDIA Corporation have dropped to 24 times, down 25% from the previous high of 32 times, making the tech sector a safe haven in the market volatility. He asked, "If the situation continues to worsen, where else would you put your funds?" However, market participants also advise investors against blindly avoiding risks or completely withdrawing from the market, as this could lead to missing future growth opportunities. Arnim Holzer, Global Macro Strategy Specialist at Easterly EAB, said, "We are cautious about strategies that involve completely avoiding risks or turning to cash, as this may limit future growth opportunities." Adam Hetts, Global Head of Multi-Assets at Janus Henderson Investors, believes that these "astonishing tariffs" may just be a negotiation strategy of the Trump administration, which could keep the market in turmoil for some time. He noted, "We have seen that this administration's tolerance for market pains is much higher than expected, and the real question now is how much economic pain it can endure." Nigel Green, CEO of deVere Group, bluntly criticized, "Trump is confidently dismantling the global economic system established after World War II, the very foundation that has made America and the world more prosperous."