Stock markets and the dollar tumbled on Thursday, April 3, 2025, after United States President Donald Trump announced tariffs on many countries.
The dollar slumped by as much as 2.6 per cent versus the euro, its biggest intraday plunge in a decade, and suffered sharp losses also against the yen and British pound.
On stock markets, Wall Street’s tech-heavy Nasdaq Composite dove around six per cent, while the retreat in the S&P 500 was its biggest in a day since 2020.
“The simultaneous decline in both stocks and the US dollar speaks volumes about investor confidence in Trump’s trade policy,” said City Index and FOREX.com analyst Fawad Razaqzada.
Shares in apparel companies, which rely on cheap labour in factories abroad, fell sharply with Nike sinking more than 11 per cent and Gap tanking more than 20 per cent.
Apple, whose iPhones are largely manufactured in China, fell by over nine per cent.
Across the globe, shares in major sectors including auto, luxury, and banking also took big hits.
Shares in Jeep-maker Stellantis fell 7.5 per cent after it said it would pause production at some plants in Canada and Mexico as 25 per cent car tariffs came into force.
Tokyo’s Nikkei briefly collapsed by more than four per cent.
In Europe, both the Paris and Frankfurt stock exchanges finished the day with losses of more than three per cent.
Trump announces global tariffs, slams 14% on imports from Nigeria
Oil prices plummeted more than six per cent on concerns that an economic downturn would hit demand.
Gold, a safe haven asset in times of uncertainty, hit a new peak of $3,167.84 an ounce before retreating somewhat, AFP reported.
Yields on government bonds fell as investors fled risky assets and piled into safe-haven treasuries.
The panic came after Trump unveiled a blitz of harsher-than-expected levies aimed at countries he said had been “ripping off” the United States for years.
The measures included a 34 per cent tariff on world number two economy China, 20 per cent on the European Union, and 24 per cent on Japan.
A number of others will face specifically tailored tariff levels, and for the rest, Trump said he would impose a “baseline” tariff of 10 per cent, including on Britain.
The head of fixed interest research at wealth manager Quilter, Richard Carter, said: “Markets, unsurprisingly, have reacted badly.
“U.S. Treasury yields have fallen sharply, as investors take flight and look for safe-haven assets.
“This would suggest the Federal Reserve will need to put additional rate cuts on the table to look to prevent recession being triggered, but should it face inflation rising too, it is in somewhat of a bind.”
As world markets tumbled, Trump acknowledged the shock brought by his tariffs, likening it to a medical “operation,” but said the United States economy would emerge “far stronger”.
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