What’s Happening to My Stocks?

President Donald Trump imposed high tariffs on imports to the United States under the International Emergency Economic Powers Act of 1977 (IEEPA). Global equity markets have been experiencing backlash, primarily because of heightened trade tensions due to the tariffs imposed by the United States.​

Fall in U.S. Stock Market

President Donald Trump imposed across-the-board tariffs on imports on April 2, 2025, that pushed U.S. stock averages into a sharp decline. A few of the U.S. markets plunged. The S&P 500, which focuses on the best 500 public firms in the United States, dropped 6%. The Nasdaq, a New York City-based American stock exchange, dropped 5.8%. The Dow Jones Industrial Average (DJIA), one of the oldest American stock market tracking 30 major companies, plunged 2,231 points. The widespread sell-off wiped out almost $5 trillion of market capitalization in just two days.

International Market Reactions

The impact did not just strike the U.S., but was global. Japan's Nikkei 225, an index that follows the Tokyo Stock Exchange, dropped almost 8%, instituting an automatic trading halt. Canada S&P/TSX Composite Index, the primary Canadian stock market index, dipped 2.1%, their lowest since August 2024. The European markets were also not left out, with the STOXX 600 index recording its worst week in five years.

Investor Sentiment and Economic Indicators

Investor nervousness heightened, with the Cboe Volatility Index (VIX) hitting levels not seen since the start of the COVID-19 pandemic. The CBOE Volatility Index, or VIX, is a real-time index that tracks the market's expectation of the relative strength of future price movements for the near-term S&P 500 Index (SPX) of the US. Recession worries intensified, with JPMorgan analysts raising the likelihood of recession in 2025 to 60%. Crude oil prices also fell, with Brent crude down nearly 3% to $63.7 a barrel, on concerns of weaker global demand.

Corporate and Government

Responses Responding to the call of the market crisis, there were some Chinese state-owned firms that included China Chengtong Holdings Group and China Reform Holdings Corp which pledged to increase share buying in an effort to prop up the stock market. The Chinese central bank also promised to back the interventions in a quest to stabilize market confidence. The recent trends of the stock market show the entire impact that foreign trade policy has on the stability of international finance. The investors are eager to follow the new economic condition by means of this occurrence.

Works Cited

Reuters. (2025, April 7). TSX futures hit eight-month low as Trump stands firm on tariffs. Reuters. https://www.reuters.com/markets/tsx-futures-hit-eight-month-low-trump-stands-firm-tariffs-2025-04-07/

Reuters. (2025, April 4). Breakingviews: Trade war brinkmanship multiplies economic damage. Reuters. https://www.reuters.com/breakingviews/trade-war-brinkmanship-multiplies-economic-damage-2025-04-04/

Reuters. (2025, April 7). Rupee tanks as U.S. tariffs fuel Asia equities meltdown. Reuters. https://www.reuters.com/markets/currencies/rupee-tank-us-tariffs-fuelled-meltdown-asia-equities-2025-04-07/

Reuters. (2025, April 8). China state firms vow to boost share purchases to stabilize plunging market. Reuters. https://www.reuters.com/markets/asia/china-state-firms-vow-boost-share-purchases-stabilize-plunging-market-2025-04-08/

Reuters. (2025, April 8). China cenbank says it supports sovereign wealth fund stepping in to support stocks. Reuters. https://www.reuters.com/world/china/china-cenbank-says-it-supports-sovereign-wealth-fund-stepping-support-stocks-2025-04-08/

The Wall Street Journal. (2025, April 4). Live coverage: Stock market plunges after tariffs announcement. The Wall Street Journal. https://www.wsj.com/livecoverage/stock-market-tariffs-trade-war-04-04-2025

Wikipedia contributors. (2025, April 7). 2025 stock market crash. Wikipedia. https://en.wikipedia.org/wiki/2025_stock_market_crash

The White House. (2025, April 2). Fact Sheet: President Donald J. Trump Declares National Emergency to Increase Our Competitive Edge, Protect Our Sovereignty, and Strengthen Our National and Economic Security.