Live Stock Market News: Nasdaq Composite Down 4.5% & Dow Drops 1,200 Points

Liberation Day has come and gone and the markets do not like Trump’s sweeping reciprocal tariff plans. You can read our live blog where we covered the tariff announcements and market reaction from last night, but the big picture is:

• The United States is issuing reciprocal tariffs that are largely calculated on trade imbalances rather than tariff rates. So a country might levy an average tariff on the United States of 1-2%, but will see 20-30% reciprocal tariffs under Trump’s plan if their exports to the U.S. are higher than their imports. 
• These tariffs are also additive, so while China’s calculated tariffs under this plan are 34%, tariffs from the country will also include a previously announced 20% tariff to reach 54% in total. 
• These tariffs go into effect on April 9, if they do go into effect without any revisions the United States weighted average tariff would be 29% as calculated by researcher EvercoreISI. That’s the highest rate in 100 years, surpassing tariffs that were enacted after the Great Depression began. 

In reaction, markets are plummeting this morning. As of 8:50 a.m. ET:

• Nasdaq Futures: -881.25 (-4.46%)
• S&P 500 Futures: -212.25 (-3.72%) 
• Dow Jones Futures: -1,272 (-3.00%) 

Why Is the Market Plummeting?

There are a few key reasons the market is plummeting today:

• The risk of recession has skyrocketed: Prediction market Polymarket had a 22% probability of a recession in 2025 before Trump began enacting tariffs. As of this morning, prediction markets are pricing in a 46% chance of recession. That’s about from a 38% chance before these tariffs were announced. 
• Tariffs were above expectations: A weighted-average tariff of about 29% across the world is far beyond expectations. Markets are worried this level of tariffs will cause chaos across corporate earnings as trade decreases and companies become cautious with their spending plans. 
• Trump seems more serious about tariffs: Markets plummeted in 2018 when Trump began discussing large tariffs during his first Presidency. He eventually backed off his more ambitious tariff plans and the bull market later resumed. It’s hard to know what Trump is using a ‘negotiating tactic’ versus the level of tariffs he would like to enact, but his actions on Wednesday raise the possibility very high tariffs will remain in effect for an extended period of time. 

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