April 4, 2025 | By FlashpointNews Team
The U.S. stock market faced another massive blow this week as investors reeled from the impact of President Donald Trump’s newly announced tariffs. With China retaliating with its own 34% tariff on U.S. imports, Wall Street entered panic mode, resulting in a historic two-day selloff that wiped out nearly $5 trillion in market capitalization.
Markets in Freefall
The Dow Jones Industrial Average plunged another 2,200 points on Friday, bringing its total two-day loss to a staggering 4,000 points. The S&P 500 and Nasdaq both fell by approximately 6%, adding to Thursday’s declines of 5% and 6% respectively. The S&P’s total drop of 9% this week marks the worst weekly performance since March 2020, during the early days of the pandemic.
Tech stocks were hit hardest, with the Nasdaq officially entering a bear market—more than 20% off its December 2024 high. Apple, Tesla, and Nvidia alone accounted for over $1 trillion in evaporated value.
Why It Happened
The market crash was triggered by Trump’s tariff announcement on Wednesday, which imposed a 10% duty on most foreign imports. In response, China fired back with a massive 34% tariff on U.S. goods. Investors quickly soured on global trade prospects, especially as Trump doubled down, posting on social media that his “POLICIES WILL NEVER CHANGE.”
Major U.S. corporations with strong ties to China suffered devastating losses. Apple, Starbucks, and Tesla all saw shares drop by over 7%. Other heavy losers included Boeing, Citigroup, Bank of America, Qualcomm, and Wells Fargo—each down more than 15% in just two days.
The Fed’s Response
President Trump called on Federal Reserve Chairman Jerome Powell to slash interest rates immediately. But Powell resisted the pressure, stating that it was “too soon” for an emergency cut. He warned that the tariffs would bring “higher inflation and slower growth,” casting a long shadow over the economy.
Oil Prices and Recession Fears
Amid the chaos, Brent crude oil prices fell by 7% to $65 per barrel—the lowest since April 2021—as fears of a global recession intensified. JPMorgan economists now estimate a 60% chance the world enters a recession in 2025.
The CBOE Volatility Index (VIX), Wall Street’s “fear gauge,” spiked nearly 80% since Wednesday and is on track to close at its highest level since October 2020.
A Stark Historical Comparison
The back-to-back market crashes are historically rare. This marks only the fourth time in 20 years that the S&P 500 has dropped more than 4.8% on consecutive days—joining the infamous weeks of the 2008 financial crisis and March 2020’s COVID crash.
Contrasting Economic Data
Ironically, Friday also delivered a surprisingly strong March jobs report, with the U.S. adding 228,000 jobs—far exceeding forecasts. EY-Parthenon economist Lydia Boussour called the report a “reminder that economic fundamentals were robust heading into the tariff storm.” But she also warned of growing labor market risks.
What This Means for Investors
This week’s meltdown highlights the fragility of market confidence in the face of geopolitical and economic shocks. While strong jobs data might provide some support, the broader picture suggests heightened volatility and risk in the months ahead.
Investors may want to revisit their portfolios, consider more defensive assets, and stay informed on how escalating trade tensions will affect global markets.
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