World markets sink after Trump tariffs generate COVID-like shock

The SAP 500 was down 4.38 in morning trading, more than other major stock markets, and It’s on track for its worst day since COVID shattered the global economy five years ago

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Financial markets around the world are reeling on Thursday following President Donald Trump's latest and most severe set of tariffs, and the US stock market is taking the worst of it so far.

The S&P 500 was down 4.3% in morning trading, more than other major stock markets, and it's on track for its worst day since COVID shattered the global economy five years ago. The Dow Jones Industrial Average was down 1,538 points, or 3.6%, as of 10:55 a.m. Eastern time, and the Nasdaq composite was 5.6% lower.

Little was spared in financial markets as fear flared globally about the potentially toxic mix of higher inflation and weakening economic growth that tariffs can create.

Everything from crude oil to Big Tech stocks to the value of the US dollar against other currencies fell. Even gold, which has hit records recently as investors sought something safer to own, pulled lower. Some of the worst hits walloped smaller US companies, and the Russell 2000 index of smaller stocks dropped 6.6% into what's called a "bear market" after losing more than 20% from its record.

Investors worldwide knew Trump was going to announce a sweeping set of tariffs late Wednesday, and fears surrounding it had already pulled Wall Street's main measure of health, the S&P 500 index, 10% below its all-time high. But Trump still managed to surprise them with "the worst case scenario for tariffs," according to Mary Ann Bartels, chief investment officer at Sanctuary Wealth.