It turns out what President Trump meant by “Liberation Day” is that he planned to liberate the S&P 500 from any chance of recovering its Q1 losses.
After Trump unveiled aggressive tariffs via a now-infamous poster board that will haunt Wall Street’s nightmares for years, the entire stock market melted down today, obliterating nearly $2 trillion in market value as soon as the opening bell rang.
If the chart itself wasn't straightforward enough, here’s the even shorter version: Trump imposed a blanket reciprocal tariff rate of 10% on all exporters to the US, in addition to higher reciprocal rates on 60 trading partners with larger trade deficits, such as China, Japan, and the EU.
The policy was more severe than many on the Street were begging for predicting. While Trump argued the levies will bring manufacturing back stateside, all Wall Street could see was an economic wrecking ball.
The damage was immediate and sweeping: Over 80% of the companies in the S&P 500 were in the red as of 10:20 this morning, with two thirds of those stocks down at least 2%.
- The hardest-hit companies were those that heavily rely on manufacturing abroad, such as Apple (down 9.25% today), Nike (down 14.44%), and Lululemon (down 0.58%).
- Retailers that import a lot of products, such as Target (down 10.86%), and Dollar Tree (down 13.34%) also sank.
- Big tech tumbled: Amazon sank 8.98%, Meta Platforms shed 8.96%, and Alphabet fell 4.02%.
Making sense of market moves
Stay up to date on the latest market news with daily analysis of the investing landscape, served up Brew-style.
The good news: Even in a sea of red, some stocks were up. Consumer staples was the only sector on the S&P 500 in the green today, which makes sense: It’s a classic go-to for protection against an economic downturn, as are the utility and healthcare sectors, both of which didn’t fall as hard as the rest of the market.
Companies whose products are American-made rose on shareholder relief that they were spared from the bloodbath, as did several ETFs connected to Mexico and Canada.
Just another negotiating tactic?
Analysts have been quick to point out that these tariffs are so crazy they are likely just a starting point for negotiations.
But the White House certainty isn’t marketing this as just another tactic pulled from the pages of The Art of the Deal. The White House said tariffs will, “remain in effect until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated.”
The good news? In the long run, a diversified portfolio weathers even the strongest of storms. So liberate yourself from freaking out (too much) today.—LB