Closing Recap

U.S. stocks plummeted in a brutal session, hitting new lows for 2025, as President Trump’s aggressive global tariff announcement ignited severe trade war and recession fears; oil, gold, and the dollar all declined sharply while Treasury yields plunged. 

Key Takeaways 

• Massive Market Sell-off: Major indices suffered their worst day since 2020, with the S&P 500 down nearly 5%, Nasdaq almost 6%, and Russell 2000 over 6.5%. 
• Tariffs Trigger Trade War Fears: More aggressive-than-expected tariffs (10% base, higher for EU/Japan, massive hike for China) sparked panic selling and fears of global economic damage. 
• Recession Fears Surge: The scale of the tariffs led to a rapid increase in recession expectations, overwhelming other factors. 
• Few Places to Hide: Selling was broad and deep; only utilities, some consumer staples, and bonds offered refuge. 
• Rate Cut Bets Soar: Interest rate futures now price in 4 Fed cuts this year, starting in June, reflecting recession fears, despite cautious Fed commentary today. 
• Commodities Crushed: Oil prices plunged over 6% on demand destruction fears; even gold fell significantly despite risk-off sentiment. 
• Dollar & Yields Plunge: The U.S. dollar index cratered over 2%, and Treasury yields dropped sharply (10-yr briefly below 4%) in a flight to safety and reaction to rate cut bets. 

Market Overview 

It was an exceptionally brutal day on Wall Street, with markets collapsing to their lowest levels of 2025 in reaction to the Trump administration’s sweeping and more aggressive-than-anticipated global tariff regime. The announcement, confirming a 10% base tariff on all imports (effective Saturday) and significantly higher targeted rates for major partners like the EU (20%), Japan (24%), and especially China (new 34% adding to existing levies for a base rate over 54%, effective April 9th), ignited fears of a full-blown global trade war and sent shockwaves through financial markets. Canada and Mexico were notably excluded from this specific reciprocal regime but remain subject to other tariff plans. 

Index	Up/Down	% Change	Last
DJ Industrials	-1679.39	-0.0398	40545
S&P 500	-274.36	-0.0484	5396
Nasdaq	-1050.44	-0.0597	16550
Russell 2000	-134.82	-0.0659	1910

The sell-off was severe and widespread. The Dow Jones Industrial Average cratered by nearly 1,700 points, the S&P 500 endured its worst session since the pandemic turmoil of June 2020 (-4.8%), and the tech-heavy Nasdaq plunged almost 6%. Small caps were hit even harder, with the Russell 2000 down over 6.5%. With today’s losses, the S&P 500 is now down over 12% from its record high, and the Nasdaq is down roughly 17%, firmly in correction territory. The sheer scale of the selling underscored the market’s view that these tariffs pose a significant threat to global growth, corporate profits, and consumer prices, dramatically increasing recession probabilities. Fitch Ratings noted that U.S. growth is now likely to be slower than their previous forecast due to the tariffs. 

In this risk-off maelstrom, traditional safe havens had mixed results. Bonds rallied strongly, pushing yields down significantly. However, gold sold off sharply despite the chaos, potentially due to forced selling or margin calls. The U.S. dollar also plunged as recession fears took hold and rate cut expectations surged. Market pricing now implies the Federal Reserve will need to cut rates four times this year, a sharp increase from prior expectations. This market view contrasts starkly with comments today from Fed officials Cook and Jefferson, who maintained a cautious, data-dependent stance, stressing patience and noting existing inflationary pressures from tariffs, highlighting a growing disconnect between market fears and stated Fed policy. The severity of the reaction raises questions about the relevance of upcoming data, like tomorrow’s Nonfarm Payrolls report, in the immediate term.

Economic Data

Economic data released today was largely overshadowed by the tariff news but showed stable jobless claims and a slowing services sector. 

• Weekly Jobless Claims: Fell to 219,000 from 225,000, better than the 225,000 consensus. However, continuing claims rose to 1.903 million from 1.847 million, indicating potentially longer spells of unemployment.
• Trade Balance (Feb): The deficit narrowed to – 122.7B from -$130.7B in January, as exports rose while imports were flat. The deficit with China specifically narrowed. 
• ISM Services PMI (Mar): Dropped to 50.8 from 53.5 in February, missing the 53.0 consensus. While still indicating slight expansion, the slowdown was notable, particularly in new orders (50.4 vs. 52.2). The prices paid index eased slightly to 60.9 from 62.6 but remained elevated. 
• S&P Global Services/Composite PMI (Mar Final): Final prints confirmed the flash readings, showing solid expansion (Composite 53.5, Services 54.4). 

Commodities, Currencies, and Treasuries 

Commodities were routed amid fears of tariff-induced global demand destruction. WTI crude oil plummeted 6.6%, settling below $67/bbl, while Brent fell 6.4%. News that OPEC+ might accelerate the unwinding of output cuts added further pressure. Even gold, typically a safe haven, succumbed to the intense selling pressure, dropping 1.4% to settle near $3,121/oz, potentially reflecting liquidation needs or margin calls overwhelming safe-haven flows. 

Asset	Up/Down	Last
WTI Crude	-4.76	66.96
Brent	-4.81	70.14
Gold	-44.5	3121.7
EUR/USD	0.018	1.1036
USD/JPY	-3.13	146.13
10-Year Note	-0.151	0.04044

Treasury prices surged as investors scrambled for safety, sending yields plunging. The 10-year yield dropped over 15 basis points, briefly dipping below the key 4.00% level for the first time since October 2024 before closing just above it. The U.S. dollar index (DXY) experienced a massive decline of over 2%, hitting its lowest levels since early October, driven by rapidly falling yields and surging U.S. recession fears. The dollar weakened dramatically against the euro and initially against the yen before paring some losses versus the latter.

Looking Ahead 

The market’s immediate future will likely be dictated by the fallout from the tariff announcement. Investors will be watching for signs of stabilization or further panic, as well as any potential retaliatory responses from targeted nations. Last week’s Nonfarm Payrolls report, while significant for gauging the underlying economy, may struggle for attention amid the intense focus on trade and recession risks. Market participants will also closely monitor any further comments from Fed officials, looking for any shift in tone in response to the market turmoil and increased rate cut expectations.