Trump's Tariff Announcement Causes 19% Drop in S&P 500, Heightens Recession Concerns

The S&P 500 fell dramatically as tariffs reached their highest levels since 1943, igniting fears of a recession and underscoring volatility in U.S. markets.

Sources:
The Motley FoolThestreet+1
Updated 5h ago
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Expert Analysis

Expert Insights on Tariffs and Market Corrections

The risk of tariffs to the economy isn't lost on veteran fund manager Ken Fisher.
Ken Fisher
founder of Fisher Investments
Thestreet
Sometimes, it becomes a distinction without a significance, said Ken Fisher. There is not a marked difference between a market that's down 19%, which would be categorized as a large correction, and a market that's down 21%, that would be categorized as a small bear market...a 2% difference is something that wiggled in a day or two.
Ken Fisher
Thestreet
Fisher maintains that history has repeatedly shown that tariffs are always worse for the country imposing them than for the countries they're imposed on.
Ken Fisher
Thestreet
Average gain in S&P 500 post-correction
12%
The Motley Fool
Number of market corrections since 1957
32
The Motley Fool
Total annual return of S&P 500
10%
The Motley Fool
Key Facts
  • The S&P 500 has suffered multiple corrections historically, yet it manages to rebound with a total annual return above 10%.
  • Market volatility soared following the announcement of Trump's punitive tariffs regime on April 2.Cnn1

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Midday Trends

Comparative Performance: International vs U.S. Stocks

Performance of Morningstar Global Markets Index ex-US
6.46%
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Performance of US Markets Index
-6.59%
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Key Facts
  • International markets outperformed U.S. stocks in the lead-up to April 24, with the Morningstar Global Markets Index ex-US up 6.46%, while the U.S. Markets Index was down 6.59%.Cnn1
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Background Context

Market Reaction to Trump's Tariff Announcement

Drop in S&P 500 due to tariffs
19%
The Motley Fool
Average tax on U.S. imports
11.5%
The Motley Fool
Increase in average tax on U.S. imports
9%
The Motley Fool
Key Facts
  • Trump's tariff announcement on April 2 led to a dramatic 19% drop in the S&P 500, raising concerns over a potential recession.
  • Tariffs increased the average tax on U.S. imports to 11.5%, marking a return to levels not seen since 1943.The Motley Fool
  • Historically, the S&P 500 has gained an average of 12% during the 12-month period following its first close in correction territory, showing resilience despite market disruptions.

Other Facts in these Reports

Risk of Bear Market warned by Ken Fisher due to tariffs
Balanced Model Portfolio advised to diversify with non-US equities
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