Wall Street Takes a Historic Beating

• S&P 500 dropped 4.8%, its worst single-day performance in years.
• Nasdaq Composite plummeted 6.1%, signaling sharp stress in tech-heavy sectors.
• Dow Jones shed 4%, reflecting broad-based pressure.
• Russell 2000 (small-cap index) plunged 6.6%, now officially in bear territory (>20% off highs).
• Over 80% of S&P 500 stocks closed lower — a sign of systemic fear, not isolated weakness.

Tariff Breakdown – A Global Economic Shock

• Minimum 10% tariff on all imports
• Up to 49% tariffs on certain developing Asian nations
• Targeted sectors: electronics, autos, tech components, consumer goods
• EU and China face much steeper rates, likely prompting retaliatory moves

Global Assets See Sharp Repricing

• Gold, often a safe haven, ironically pulled back from record highs
• Crude Oil fell below $67 amid demand concerns
• The U.S. Dollar weakened against the yen and euro as risk-off sentiment surged
• 10-Year Treasury Yield dropped to 4.04% from 4.20%, suggesting rising expectations of Fed rate cuts

Economic Projections from UBS

• Tariffs could cut U.S. GDP growth by up to 2 percentage points in 2025
• Inflation may surge to near 5%, undermining any soft-landing hopes
• Fed now under pressure to balance rate cuts with inflation risks

What’s Next?

This move marks a dramatic re-escalation of global trade tensions at a time when both inflation and growth are delicately balanced.

Key risks to monitor:

• Potential retaliatory tariffs from China, EU, and others
• Impact on corporate earnings, especially multinationals
• Supply chain disruptions and commodity price volatility
• Possible policy shifts from the Federal Reserve