US markets in freefall as Wall Street reacts to tariffs

Dow and NASDAQ indexes suffer historically bad days

- KELLY RISSMAN

On a historically bad day on Wall Street, the NASDAQ broke a record with its largest single-day point drop in the market’s 50 year history as investors responded to president Donald Trump’s tariff plan.

Both the NASDAQ and Dow Jones suffered their worst days since March 2020 at the start of the Covid-19 pandemic. The Dow fell 1,679 points, which ranks in the top five for most points lost in a single day. The NASDAQ fell 1,050 points for its largest one-day drop.

The drop happened as investors were spooked by the potential impact of president Donald Trump’s tariff plan – and fears it could spark a global trade war. Mr Trump has said the policy is necessary to level the playing field for American manufacturers. However, many economists have warned his plan could have a negative impact on the economy as tariffs are expected to raise prices.

Despite yesterday’s historically bad day, some analysts believed it could have been worse. “Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” Sean Sun, portfolio manager at Thornburg Investment Management, told the Associated Press.

But Mr Trump remained confident.

“The markets are going to boom,” the president predicted outside the White House yesterday. “The country is going to boom.”

Against the backdrop of sliding markets, White House officials defended the new tariffs.