Dow Jones drops 1,400 points as US stock market leads global sell-off after Trump’s tariffs spark recession fears – The Times of India-OxBig News Network

The US stock market plunged sharply on Thursday, with the Dow Jones Industrial Average dropping 1,400 points, or 3.3%, amid widespread concerns triggered by President Donald Trump’s latest set of severe tariffs.
According to news agency AP, the S&P 500 fell 4%, while the Nasdaq Composite dropped 5.1%, reflecting a broader global market sell-off. At one point in the morning, the S&P 500 was on track for its worst day since the COVID-19 pandemic began in 2020.
The announcement of new tariffs on imports, including a 10% baseline tax on a range of products, caused significant alarm among investors, fuelling fears of rising inflation and slowing economic growth. The impact was felt globally, with major stock indexes in Europe and Asia also suffering sharp losses.
The tariffs have rattled markets, with commodities like crude oil, tech stocks, and even gold—all traditionally seen as safe havens—declining in value. The Russell 2000 index of smaller US companies dropped 5.9%, dipping more than 20% below its record.
Trump’s new tariffs include heightened taxes on imports from countries like China and those in the European Union. Economists warn that the tariffs could lower US economic growth by as much as 2 percentage points this year and push inflation close to 5%, potentially dragging the economy into a recession.
“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,” said Sean Sun, portfolio manager at Thornburg Investment Management.
The Federal Reserve faces a challenging dilemma. While it may consider cutting interest rates to stimulate the economy, such moves could further fuel inflation. The yield on the 10-year US Treasury note dropped to 4.04% from 4.20% late Wednesday, reflecting growing concerns about the economy’s future.
Despite the ongoing economic growth, data released Thursday showed signs of strain. Unemployment claims remained lower than expected, suggesting a stable labour market, but weaker-than-anticipated growth in US service industries highlighted the broader effects of the tariffs. Businesses reported supply chain disruptions, higher costs for materials like aluminium, and delays in deliveries.
Corporate stocks took a major hit, with retailers and airlines among the worst affected. Best Buy dropped 15.2%, United Airlines lost 12.3%, and Target fell 10.3%, as investors grew worried about the impact of the tariffs on consumer spending and business activity.
Internationally, European and Asian markets followed suit. France’s CAC 40 dropped 3.3%, Germany’s DAX lost 3%, Japan’s Nikkei 225 fell 2.8%, and Hong Kong’s Hang Seng dropped 1.5%. South Korea’s Kospi also lost 0.8%.