Market Meltdown: Trade Tariffs Trigger Stock Slump

U.S. stocks plunged due to President Trump's tariffs on key trade partners, sparking fears of a trade war and recession. Investors retreated to bonds. Major indices and tech stocks fell sharply, with expectations rising for Federal Reserve rate cuts to stabilize the economy.

U.S. stocks experienced significant closing declines on Thursday, with tech giants and small companies alike suffering amid fears of an impending trade war and recession. The declines followed President Donald Trump's announcement of sweeping tariffs on major trade partners, causing investors to flee risky assets in favor of government bonds.

China and the European Union, among others, have vowed retaliation, creating a volatile market environment. The CBOE Volatility Index hit a three-week high as traders anticipated the potential economic fallout. Major indices, including the S&P 500, Nasdaq, and Dow Jones, reported significant losses, driven by the sharp drop in technology stocks.

As traders adjusted to the new economic landscape, there was a marked increase in expectations for the Federal Reserve to implement rate cuts. Eyes now turn to upcoming payroll data and words from Fed Chair Jerome Powell for insights into the economic future. Meanwhile, consumer staples saw modest gains, marking one of the few areas of growth amidst the turmoil.

(With inputs from agencies.)