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U.S. stock futures and the dollar tumbled on Wednesday after President Donald Trump unveiled “liberation day” tariffs that were larger than investors had expected.
President Trump strode up to the lectern in the White House’s Rose Garden shortly after 4 p.m. Eastern time to the sound of trumpets and applause from the audience.
The initial market reaction was relatively benign — with stock futures ticking higher while the dollar climbed against rivals like the euro
EURUSD +0.50% — as Trump kicked things off by announcing a 10% across-the-board tariff on all goods entering the U.S. That figure was in line with some of the more benign media reports ahead of the event.
But then, Commerce Secretary Howard Lutnick handed Trump a giant table enumerating the higher rates that would be applied to certain individual American trading partners, and investors’ mood suddenly shifted. Futures turned sharply lower, along with the dollar.
According to the table, which was shared on X by the White House, the U.S. will slap a 34% tariff on Chinese goods, a 20% tariff on goods entering from the European Union and 46% on those from Vietnam.
LIBERATION DAY RECIPROCAL TARIFFS 🇺🇸 pic.twitter.com/ODckbUWKvO
— The White House (@WhiteHouse) April 2, 2025
“Futures rose about 30 or 40 points initially when he said ‘reciprocal tariffs,’” noted Steve Sosnick, chief market strategist at Interactive Brokers, during an interview with MarketWatch.
“Reciprocal doesn’t sound so bad. Then, when people actually saw what the numbers were — 10% across the board and in many cases much higher — it became very tangible for them. And down we went.”
Stock futures were sharply lower when trading paused for an hour at 5p.m. Eastern. By the time it started back up an hour later, S&P 500 futures
ES00-2.70% were down 3.4% at 5,520; Nasdaq-100 NQ00 -3.21% futures were down 4.2% at 18,927; and futures tied to the Dow Jones Industrial Average YM00 -2.00% were off by 892 points, or 2.2%, at 41,559. Investors were bracing for a beatdown for the stock market
SPX +0.67% DJIA +0.56% COMP +0.87% at the open on Thursday.
Currency markets reacted in similar fashion to stocks, with the U.S. dollar seeing an initial pop that quickly reversed. The ICE U.S. Dollar Index DXY -0.71%was off by 0.5% at 103.74 in recent trade. The buck was roughly flat compared with the Canadian dollar USDCAD -0.01% and Mexican peso USDMXN +0.09%
“It’s a seismic day for global trade. Trump is blowing up the postwar system that made the U.S. and the world more prosperous, and he’s doing it with reckless confidence,” said Nigel Green, chief executive of global financial advisory giant deVere Group.
Wedbush analyst Dan Ives characterized the announcement as “worse than the worst-case scenario.”
“While there are many details to be worked out and investors will focus on the specifics over the coming 24 hours, the jaw-dropper was the China reciprocal tariff of 34%. Taiwan at 32% is the other major one along with the E.U. at 20%,” Ives said.
Diane Swonk, chief economist at KPMG U.S., said that Wednesday’s announcement would push U.S. tariffs to the highest level since the early 20th century.
Still, others pointed out that plenty of ambiguity remains. It is still unclear how long these sky-high levies will even remain in effect, said Adam Hetts, portfolio manager and global head of multiasset at Janus Henderson Investors.
