Tariff Uncertainty
Markets Took a Hit Yesterday and They're Still Sliding Today. Here's What to Know.
The markets had a tough day yesterday and unfortunately, the selling hasn’t let up much today either.
To recap: on Thursday, the Dow fell about 1,500 points (roughly 3.5%), while the S&P 500 and Nasdaq were down 4% and 5%, respectively. The Russell 2000, which tracks smaller companies, dropped nearly 6% and officially dipped into bear market territory.
Today, markets are still under pressure as investors digest the impact of what sparked all this: a sweeping new round of tariffs announced by President Trump.
What’s Going On?
President Trump rolled out a plan to impose “reciprocal tariffs” on imports from over 180 countries. The goal, according to the administration, is to level the playing field claiming that many countries charge the U.S. more to import goods than we charge them.
Here’s the short version:
- A 10% baseline tariff applies broadly, but many countries are facing much higher rates.
- China is now subject to a 54% total tariff when you include previous rounds.
- The EU is hit with a 20% tariff, Japan 24%, India 26%, and Vietnam tops the list at 46%.
- Others, like the U.K., Brazil, Singapore, and Australia, are seeing the baseline 10%.
The market wasn’t expecting anything this aggressive, and the sharp reaction reflects concerns about rising costs, slower global trade, and the potential for an economic slowdown.
Who’s Getting Hit the Hardest?
Some sectors and companies are feeling the pain more than others:
- Retailers that rely on cheap imports saw massive drops
- Big international players like Apple fell hard as well, even if their direct exposure to tariffs is limited. Tech in general is having a rough stretch, as it usually does during high-volatility periods.
- Smaller companies, especially those more exposed to cost swings, were heavily sold off.
That said, not everything was red:
- Real estate investment trusts (REITs) held up better than most. With bond yields falling, some investors shifted into interest rate–sensitive sectors like real estate.
- International companies with minimal exposure to the U.S. weathered the storm relatively well.
- Fixed income has held up relatively well considering a drop in the 10-year treasury rate touching 4%.
What Happens Next?
That’s the big question and part of the reason markets are still sliding today. There’s a lot of uncertainty around how long these tariffs will last, whether other countries will retaliate (China already has with a 34% tariff announced today) and how all of this plays into inflation, interest rates, and the broader economy.
Bottom line: we’re in wait-and-see mode, and markets don’t love uncertainty.
What Should Investors Do?
Here’s our advice: don’t panic. Sharp drops like this can be unsettling, but they’re not unusual and reacting emotionally usually does more harm than good.
During times like this, it can be difficult to see through the uncertainty. Something to keep in mind….Since 1975, the 50 best stock market days were preceded by an average market decline of 6.7% over one month and 10.2% over two months.
If you’re a long-term investor, days like these are part of the journey. And if you’ve got cash on the sidelines, there may be some solid buying opportunities emerging.
And if you’re unsure what your next move should be? That’s okay, too. Sometimes the smartest play is to sit tight, stay diversified, and not let short-term noise throw you off your long-term plan.
As always, if you want to talk through what’s going on or explore any opportunities, we’re just a call or message away.
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