Why Investors Are Ditching U.S. Stocks Amid Trump’s Controversial Tariff Plan: What You Need to Know

Global markets reacted strongly after President Trump announced his tariff plans. Investors quickly pulled away from U.S. stocks, leading to major drops in companies that depend on international supply chains.

Futures for the S&P 500 fell by 3.5%. Nasdaq futures dropped over 4.3%, and Dow futures lost around 1,000 points, a decline of 2.3%. These markets had already faced their toughest quarter in years, mostly due to fears about how the tariffs would affect the economy.

Initially, many investors were hoping for more manageable tariffs. However, Trump unveiled a 10% tariff on all trading partners along with reciprocal tariffs that raised rates for several partners to over 20%.

Dan Ives, an analyst from Wedbush Securities, described the announcement as “worse than the worst-case scenario” investors had feared. This situation creates challenges for large U.S. companies that are heavily involved in the global market. Stocks for major companies took a hit: Apple fell nearly 7%, Amazon dropped 6%, and Walmart decreased by 5%. Nike, which gets half of its footwear from Vietnam, saw a 7% decline in after-hours trading.

Dollar store chains were not spared either. Five Below shares plummeted 13.5%, and Dollar Tree faced a loss exceeding 11%.

In response to the market fluctuations, Treasury Secretary Scott Bessent expressed that he didn’t focus too much on after-hours trading. He mentioned a “mag7” issue, referring to the seven leading tech stocks, known as the “magnificent 7,” rather than a broader economic problem.

Automakers experienced varied impacts. General Motors and Ford dipped slightly, while Stellantis, which has significant manufacturing in Europe, fell nearly 2%.

Goldman Sachs projected that tariffs could raise the price of imported cars by up to $15,000. Even vehicles assembled in the U.S. risk price increases of around $8,000 due to these tariffs.

It’s clear that Trump’s tariff strategy sends ripples through the economy, affecting stock prices and consumer costs. As this situation unfolds, future market reactions will be closely watched by both investors and consumers alike.



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