Trump reciprocal tariffs: US stock markets may see nearly $2 trillion wipeout today. Here’s why | Stock Market News

Trump tariff impact: Apple, Walmart, Nike and other major companies that depend on countries like China and Vietnam for manufacturing could lead a rout at the US stock markets, erasing roughly $1.7 trillion from the S&P 500 Index as trading opens on Thursday. The US stock market is likely to come amid worries after President Donald Trump slapped the entire world with sweeping new tariffs that could result in an economic recession.

According to a report by Bloomberg, companies whose supply chains are most dependent on overseas manufacturing will be the most impacted. Apple Inc., which makes the majority of its US-sold devices in China, is likely to open 7.7 per cent lower at trade. Lululemon Athletica Inc. and Nike Inc., which have manufacturing ties to Vietnam, are down at least 9 per cent.

However, some stocks that remained largely unaffected with the biggest ETF tracking the S&P 500 incurring its biggest loss since 2022. As of 8 am EST, around 90 per cent stocks were trading lower in New York. Of the 500 stocks, more than half were down by at least 2 per cent during pre market hours.

“The market is realising that there is pretty much no way to spin this as a positive,” Bloomberg reported quoting Steve Sosnick, chief strategist at Interactive Brokers. “Here we are with a substantial selloff on our hands abetted somewhat by traders whose commitment to buy every dip left them wrong-footed.”

Trump tariffs: Experts flag economic slowdown, inflation

The breadth and severity of the levies were more than those imposed by Donald Trump during his first term, threatening to upend global supply chains, exacerbate an economic slowdown and boost inflation. It also left investors struggling to figure out what Trump tariffs would do to corporate profits.

The plan is equivalent to the largest tax increase since 1968, JPMorgan economist Michael Feroli wrote in a note, as per the Bloomberg report. It could add as much as 1.5 per cent to commodity prices this year, using the Federal Reserve’s preferred inflation gauge, while weighing on personal incomes and consumer spending.

“This impact alone could take the economy perilously close to slipping into recession,” Feroli wrote in his note. “And this is before accounting for the additional hits to gross exports and to investment spending.”

US assets lose big

US assets quickly emerged as the biggest losers after the announcement. Equity index futures tumbled more than 3.3 per cent, and a gauge of the dollar slumped. The Trump tariff impact elsewhere was muted in comparison: A broad gauge of Asian stocks fell 0.6 per cent and the Stoxx Europe 600 slid 2.4 per cent, while the euro rose 2.3 per cent against the dollar.

Semiconductor and industrial companies also came in for a beating. An exchange-traded fund tracking the Philadelphia Semiconductor Index sank 4.6 per cent with Nvidia Corp., Broadcom Inc., and Micron Technology Inc. pacing declines. Caterpillar Inc. and Boeing Co., which get a big chunk of sales from China, dropped at least 4 per cent.

Apple leads US stock market bloodbath

Apple led declines among the Magnificent Seven stocks with a 7.7 per cent drop. The group, which also includes the likes of Tesla, Microsoft, Nvidia, Alphabet, Amazon.com, and Meta Platforms, has been responsible for much of the US stock market’s gains over the last two years, reported Bloomberg.

As per Citigroup analysts led by Atif Malik, Apple’s gross profits could go down by as much as 9 per cent if it were to absorb the cost increases due to tariffs on China.