Stock markets suffer worst losses since pandemic following Trump tariff plans

The U.S. stock market has shed nearly a year's worth of gains since mid-Febraury with the biggest dip following President Donald Trump's announcements of wide-sweeping tariffs that rattled the world trading order.

In the two trading days since Wednesday's announcement, the Dow Jones industrial average lost 9.2%, the S&P 500 fell 10.5% and the tech-heavy Nasdaq tumbled 11.4%.

Even Friday morning's jobs report that surprised analysts with good news – an additional 228,000 jobs and a slight uptick in the unemployment rate to 4.2% – did little to slow the selloff. Largely tempering that news was China's announcement of 34% reciprocal tariffs on U.S. goods.

"The (jobs report) provides little comfort with the stock market puking out the last year’s gains in the last two days," Bill Adams, chief economist for Comerica Bank, wrote in a note following Friday's jobs report.

How much the stock market fell this week

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How the week's selloff compares to the pandemic's

The close of this week is the worst selloff since the early days of the COVID-19 pandemic when the S&P 500 dropped 28.5% over the course of 13 trading days. Those declines including a pair days where the market dropped a combined 13.9%.

Following market's rapid tumble, it quickly rebounded as Trump and Congress quickly approved a first-round of stimulus payments for Americans, and the Federal Reserve's measures also boosted the outlook for the economy.

How the stock market has changed since Election Day

The downturn since mid-February is in stark contrast to the 4.5% run-up in the S&P 500 following Trump's election when traders predicted his administration would usher in more business-friendly policies. Since Trump first began laying out plans for tariffs for Canada and Mexico, the S&P 500 has fallen 17.4% from a high of 6144 on Feb. 19.

A wide variety of factors related the tariffs may be leading traders to bid down stocks, but Oxford Economics, a global economic forecasting company, pointed to the overall drag tariffs would place on the economy and, ultimately, corporate profits.

Oxford Economics estimated Friday that the United States' combined tariff rate will be 24%, higher than it was in the 1930s. The company predicted – even before China's announcement – the higher taxes on imported goods will push inflation up to 4.5% while slowing economic growth to 1.3% from the 2% it predicted last month.

"Wealthy consumers’ stock market gains kept the economy growing in 2024 despite high prices," Adams of Comerica Bank wrote. "But the wealthy won’t feel confident enough to keep spending if this keeps up."