And just like that, Liberation Day has become Liquidation Day.
Driving the news: President Donald Trump’s new tariff regime sent global markets spiralling yesterday. Even after days of losses in anticipation of the news, investors were caught off guard by just how punishing the measures were, causing sell-offs as far as the eye can see.
- The S&P 500, Nasdaq, and Dow Jones each fell by over 3.9%, marking the worst day for Wall Street since June 2020. Over 400 of the 500 stocks listed on the S&P fell by midday.
- Canada’s main stock index, the TSX, also dropped by 3.8%. The energy sector bore much of the loss as worries about a global economic slowdown sank oil prices.
- Even gold — which has continually rattled off new record highs this year — fell sharply, likely because many traders sold their holdings to cover other losses.
Zoom out: In a day full of losers, you could argue Apple was the biggest. With huge tariffs primed to hit two of its top suppliers — 54% on China and 46% on Vietnam — investors fled. The company had its worst stock drop in five years, losing US$300 billion in market cap.
- The broader tech sector was also torched, along with sectors like consumer goods and travel, amid fears that a tariff-fuelled spending pullback is imminent.
Why it matters: Markets thrive on certainty and predictability; Trump has given them the opposite. A temporary lower blanket tariff, which traders had priced in, would have made it easier to predict potential retaliations. But Trump’s country-by-country attack has complicated things for the foreseeable future.—QH