Dow drops 2,000 points as Trump’s tariffs send markets tumbling for a second day – business live
Dow drops 2,000 points
The Dow has dropped over 2,000 points now, its biggest drop since June 2020. The index is down nearly 5% for the day, after dropping 1,679 points on Thursday.
The S&P 500 and Nasdaq Composite are also still looking at declines of nearly 6%. Nasdaq is set to close in bear market territory, meaning it has fallen 20% below its recent peak.
Key events
In a rare critique of Donald Trump, Republican senator Ted Cruz said that the new tariffs present “enormous risks” to the US economy and will make Republicans vulnerable in the 2026 midterm elections.
Contradicting what Trump has said about the tariffs, Cruz said the tariffs “would destroy jobs here at home and do real damage to the US economy if we had tariffs everywhere,” Cruz said on his podcast released Friday.
But Cruz said that the tariffs would be a “home run” if Trump lowers existing trade barriers with the new tariffs, before removing them.
Cruz said that he was considering the proposal offered by a bipartisan group of senators that would require congressional approval for new tariffs. Democrats and independents need at least four Republican votes to pass the bill, along with getting it passed in the Republican-controlled House, making it unlikely that Congress will intervene on any tariffs.
The last few days have caused what appears to be the start of a reckoning on Wall Street as investors grapple with what a tariff-ladened future could hold for the US economy.
A new report from Bloomberg suggests that Wall Street firms are considering revising down their revenue projections after Trump’s tariffs announcement, which could lead to job cuts at the major banks. Sources from UBS Group told Bloomberg that some senior investment bankers have been asked to start thinking of employee layoffs.
Meanwhile, multiple companies are reportedly delaying their IPOs in the midst of the stock market tumbling.
Klarna, StubHub and Chime were all planning their stock market debuts in the coming weeks but have quietly decided to postpone their debuts amid the turmoil on Wall Street.
“There’s no way on God’s green earth I would recommend any fintech company go public right now, particularly the ones on deck,” investor Steve McLaughlin told the Wall Street Journal.
Dow drops 2,000 points
The Dow has dropped over 2,000 points now, its biggest drop since June 2020. The index is down nearly 5% for the day, after dropping 1,679 points on Thursday.
The S&P 500 and Nasdaq Composite are also still looking at declines of nearly 6%. Nasdaq is set to close in bear market territory, meaning it has fallen 20% below its recent peak.
Carmakers Stellantis and Hyundai announced today they will try to keep prices low for customers amid consumer fears that Donald Trump’s tariffs will increase car prices.
Trump placed a 25% tariff on all cars and auto parts that started early Thursday. Many US car manufacturers rely on parts from foreign plants, especially in Mexico.
Stellantis, the producer of Jeep, Fiat and Ram, among others, said that it would offer customers pricing typically reserved for employees, the company said, following a similar discount program announced by Ford yesterday.
Meanwhile, Hyundai, based in South Korea, said that it would hold its prices steady until June 2.
“We know consumers are uncertain about the potential for rising prices and we want to provide them with some stability in the coming months,” Hyundai CEO Jose Munoz said in a statement.
Among the biggest losers so far in the massive Wall Street sell-offs are tech stocks, particularly Apple, which relies heavily on China in its supply chain.
Apple is nearly 6% down today, after falling 9% on Thursday – what amounted to over $300bn of its market value, according to the Financial Times. It was the company’s worst day since March 2020, at the beginning of the Covid-19 pandemic. The White House went out of its way to confirm that there aren’t any exceptions made for Apple in Trump’s plan.
Projections made by Rosenblatt Securities suggest that the tariffs of China, of which there will be a total of 54% after Trump’s new reciprocal tariffs against the country, could increase the cost of the cheapest iPhone 16 model by 43% – from $799 now to $1,142, depending on how much of the tariff Apple chooses to push onto customers.
The tariffs came despite moves from Apple CEO Tim Cook to try to cozy up to Trump. Cook congratulated Trump on his win in November and was in attendance at Trump inauguration. In February, Apple announced that it would invest over $500bn in US jobs over the next five years, what was largely seen as a play to get Trump to hold back on tariffs.
Berkshire Hathaway released a statement that essentially says Donald Trump posted a fake quote from Warren Buffet on social media today.
A video posted on X that Trump reposted on Truth Social said that Trump is crashing the stock market on purpose, supposedly to get the Federal Reserve to cut interest rates.
“This is why Warren Buffett just said Trump is making the best economic moves he’s seen in over 50 years,” the video says.
In a statement to CNBC, Berkshire Hathaway, Buffett’s company, said: “There are reports currently circulating on social media (including TikTok, Facebook and TikTok) regarding comments allegedly made by Warren E Buffett. All such reports are false”.
We’re likely going to see a lot of attempts from Trump and his administration to reframe the situation on Wall Street in the coming days. Keep in mind that in early March, when Trump was asked whether he could confirm that the country wasn’t heading into a recession because of his tariff policies, Trump said: “I hate to predict things like that”.
This is Lauren Aratani in New York taking over. It’s just after 1 pm here, which means trading will close for the week in about three hours.
Things are really not looking good for the major index funds. The Dow is now down over 1,700 points today, while the S&P 500 and the tech-heavy Nasdaq funds are down 5% so far today. Keep in mind this is after stocks dropped as much as 6% yesterday, and things appear to keep falling.
Comments from Federal Reserve chair Jerome Powell, who said a few hours ago that tariffs will likely mean high inflation, have appeared to push markets further into panic.
It was just months ago that Wall Street was growing on hopes that the Fed will continue to cut interest rates this year, something that seems entirely unlikely at this point.
The Press Association has produced this graphic showing the FTSE 100’s movements this year – including how tariffs have wiped out gains since the start of January:
Callum Jones
Donald Trump’s global tariffs assault is set to raise prices and slow down economic growth, Federal Reserve chair Jerome Powell has warned, defying the US president’s demands for an immediate interest rate cut.
While the US economy remains robust, Powell cautioned that there is high uncertainty over its direction. “Downside risks have risen,” he told an event in Arlington, Virginia, on Friday.
The Fed chair stressed that the tariffs unveiled by Trump this week were markedly more extensive than expected – and warned the impact would likely be larger as a result.
Trump promised to bring down prices while campaigning to win back the White House last year, and erroneously claimed on Wednesday they were “way down”, despite inflation holding firm.
But prices are likely to rise as a result of his tariffs plan, according to Powell, echoing the predictions of many economists.
Only one stock in FTSE 100 saw a rise on Friday
The UK’s FTSE 100 index has plummeted in its worst day of trading since the start of the pandemic, ending a punishing week for global financial markets.
Trading has been hammered in the aftermath of Donald Trump unveiling his full range of import taxes on countries around the world. London’s top stock market index shed 419.75 points, or 4.95%, to close at 8,054.98.
It marks the biggest single-day decline since March 2020, when the index lost more than 600 points in one day. All but one stock on the FTSE 100 fell on Friday, with Rolls-Royce, banks and miners among those to suffer the sharpest losses, PA reported. JD Sports was the lone riser.
Analysts for AJ Bell estimated that about 4.9tn US dollars (£3.8tn) had been wiped off the value of the global stock market since the US president announced his tariffs on Wednesday evening.
“China’s retaliation to Trump’s latest round of tariffs means that both sides are not backing down. It caps off a horrible week for financial markets and dragged share prices even lower,” AJ Bell investment analyst Dan Coatsworth said.
“The escalation in tariffs is bad for US companies who buy goods from China, and vice versa, because their costs will go up. It’s also bad for the world in general as we now have a repeat of the heightened geopolitical tensions between the US and China which dominated Trump’s first term in office.
“The rapid pullback in stocks and shares over the past few days has put a dent in people’s investments, including those in the US who were meant to have benefited from Trump’s actions. Instead, his tactics have caused shock waves in every corner of the world.”
Lucy Campbell
Speaking at a business journalists’ conference on Friday, Federal Reserve chair Jerome Powell said that “it’s not clear at this time what the appropriate path for monetary policy will be.”
Nevertheless, Powell did also say:
“Inflation’s going to be moving up and growth is going to be slowing…but…we’re going to need to wait and see how this plays out before we can start to make those adjustments.”
Nintendo has postponed the launch of pre-orders for Switch 2 in the United States, after the announcement of significant new tariffs by the Trump administration earlier this week.
Originally scheduled for 9 April, the pre-order date has now been delayed indefinitely, the company confirmed on Friday. The release date for the Switch 2 in the US remains set for 5 June.
In a statement provided to Polygon, Nintendo said:
Preorders for Nintendo Switch 2 in the US will not begin on 9 April 2025, in order to assess the potential impact of tariffs and evolving market conditions.
We will provide an update on timing at a later date. The official launch date of 5 June 2025, remains unchanged.
FTSE suffers biggest one-day drop since early in the pandemic
The FTSE was down almost 5% at close of play Friday, representing the biggest daily drop since early in the Covid pandemic.
The exchange was down by 4.95% at 4.30pm today, the biggest drop since 27 March 2020.
Fed’s Powell: Larger-than-expected tariffs mean higher inflation, slower growth
President Donald Trump’s new tariffs are “larger than expected” and the economic fallout including higher inflation and slower growth likely will be as well, Federal Reserve chair Jerome Powell said on Friday in remarks that pointed to the potentially difficult set of decisions ahead for the central bank.
“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” undermining both of the Fed’s mandates of 2% inflation and maximum employment, Powell said in prepared remarks for a business journalists’ conference.
Powell spoke as global markets continued a swoon that has wiped 10% off major US stock indexes since Trump announced a raft of new tariffs on Wednesday, Reuters reported. Powell did not address the selloff directly, but acknowledged that the same uncertainty engulfing investors and company executives was facing the Fed.
The Fed, he said, has time to wait for more data to decide how monetary policy should respond, but the central banks’ focus will be on ensuring that inflation expectations remain anchored, particularly if Trump’s import taxes touch off a more persistent jump in price pressures.
“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said.
“Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices. Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” he said.
President Donald Trump on Friday called on Federal Reserve Chairmen Jerome Powell to cut interest rates, saying it was the “perfect time” to do so.
“CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!,” Trump said on Truth Social.
Stock markets worldwide are careening even lower Friday after China matched president Donald Trump’s big raise in tariffs in an escalating trade war.
Not even a better-than-expected report on the US job market, which is usually the economic highlight of each month, was enough to stop the slide.
The S&P 500 was down 5% in morning trading, coming off its worst day since Covid wrecked the global economy in 2020. The Dow Jones Industrial Average was down 1,656 points, or 4.2%, as of 10:50am Eastern time, and the Nasdaq composite was 5.5% lower.
Some economists say the jobs numbers provide a rear-view mirror look at the economy and worry about damage going forward from his policies, including the sweeping “Liberation Day’’ import taxes he announced Wednesday.
Financial markets have been reeling in the face of his trade wars, AP reported.
“This could be the high-water mark as we go into spring,’’ said Diane Swonk, chief economist at the accounting giant KPMG.
Economic uncertainty remains high, she said, adding: “Do the tariffs hold? Does the trade war escalate? How disorderly do markets get? There’s a lot of things in play right now.’’
“The market needed today’s number,” said Seema Shah, Chief Global Strategist, Principal Asset Management.
“Everyone knows that economic weakness is coming, but at least we can be reassured that the labour market was robust coming into this policy-driven shock.’’
Edward Helmore
It’s just two days since Donald Trump launched his extraordinary tariff assault on the world in a bid to rebuild the US economy and roll back an era of globalization. But already shopkeepers are bracing for recession, and their customers spending less, as they prepare to increase prices.
“We’re going to have to put our prices up and people aren’t going to like it,” said Ian Anderson, store manager at Tea and Sympathy, a UK grocery store, restaurant and fish-and-chip shop stalwart in Manhattan’s West Village.
Business costs have already increased significant, he noted. But tariffs would add to the load. “We’ve survived so far because we sell base products – cakes, scones, hot cross buns, mince pies. If it was just imports, we’d struggle.”
Most retailers in the New York neighborhood agreed on one thing: the tariffs announced this week would contribute to business environment anxieties that have been mounting for years, from the 2008 economic crisis, to the initial wave of tariffs under Trump’s first administration, the Covid pandemic and the high inflation that followed.
But many also said it was too soon to tell if Trump’s tariffs would ultimately go into effect – or if they were just the opening salvo of his latest shock-and-awe style of dealmaking. A day earlier, the US treasury secretary, Scott Bessent, encouraged countries around the world to refrain from retaliating against the US.
