American stocks suffer their steepest fall since the pandemic, with tech giants such as Apple and Amazon among the worst hit as economic fears mount
American financial markets were left reeling on Thursday, as a sweeping global tariff announcement by President Donald Trump led to one of the most severe one-day sell-offs since the Covid crisis. In a matter of hours, nearly $2.5 trillion (£1.9tn) was wiped off the total market capitalisation of US-listed companies.
The decision, which Trump insists will bring long-term benefits to the American economy, has triggered a widespread investor retreat, rattled global confidence, and driven massive volatility across sectors. Despite the president’s optimism, markets plunged, with the S&P 500 falling by 4.8%, representing the bulk of the day’s staggering losses. Meanwhile, the Dow Jones dropped nearly 4%, and the tech-heavy Nasdaq lost close to 6%.
The Nasdaq 100, which is heavily influenced by major technology firms, recorded a value drop estimated at $1.4 trillion (£1.08tn). Although many companies are cross-listed across indices, the figures point to the depth of concern investors now have regarding current White House policies.
High-profile companies bore the brunt of the losses: Amazon saw $200 billion wiped from its valuation, and Apple plunged by 9.25%, equating to a staggering £240 billion in lost market capitalisation. The collapse was largely attributed to tariffs imposed on key supply chains, including components sourced from China and Vietnam—where a 46% import tariff is now in effect. Analysts say that relocating just 10% of Apple’s production to the US could cost $30bn (£23bn) and take several years.
Other well-known firms didn’t escape unscathed. Disney dropped 9%, Nike fell 14%, and ExxonMobil shed over 5% of its value. And early indicators on Friday show the decline may continue, with Tesla, Amazon, and Apple all signalling further losses in pre-market trading.
The panic wasn’t confined to the US. International markets were rattled too, with share prices dropping in Europe, Asia, and the UK, despite earlier gains for the FTSE 100 and DAX. Tariffs targeting other countries also amplified global market unease.
President Trump, however, remained defiant. “The stock is going to boom. The country is going to boom,” he told CNBC, maintaining that the global community is eager to strike new deals with the US.
But economic analysts aren’t convinced that the market will recover under the current policies. According to AJ Bell’s Russ Mould, “Investors were flooded with bargain opportunities, but many are still hesitant to take action. The scale of the sell-off suggests nerves remain high.”
Even traditionally safe havens like gold and oil took hits, indicating just how fragile sentiment has become. The VIX index, often referred to as Wall Street’s “fear gauge,” surged by 60% within a week, suggesting increased volatility in the near future.
The US dollar also took a beating, falling sharply against the pound. At the start of the year, £1 traded at $1.21; by Thursday, it momentarily topped $1.31 before settling around $1.2990.
Broader economic implications are now surfacing. JP Morgan warned of a 60% chance of global recession if tariffs remain in place, while some economists are raising concerns about potential stagflation—a rare mix of economic stagnation and high inflation.
Travel and tourism are also expected to suffer. A new report projects a 9.4% fall in international visitors to the US in 2025, stemming from deteriorating global sentiment towards the country. Oxford Economics estimates this could lead to $9bn (£6.9bn) in lost revenue by year-end.
Ultimately, Trump’s ambition for a self-reliant and flourishing American economy hinges on many factors aligning. For now, though, the immediate fallout has been harsh, and the road to recovery appears uncertain.
