- The S&P 500 two-day selloff on Thursday and Friday was the worst since the early days of the Covid-19 pandemic. The market lost about 11%.
- Investors are nervous about the impact of President Donald Trump’s tariff policy and an escalating trade war. China announced retaliatory tariffs.
- They fear what a trade war may mean for company profits and the U.S. economy.
The stock market has been throwing a temper tantrum, fueled by fear of President Donald Trump’s tariff policy and the specter of an escalating global trade war.
Americans may wonder why trade policy has made stock investors so skittish.
At a high level, investors are nervous that a prolonged trade war poses significant risks for corporate profits and the U.S. economy, according to investment analysts.
That’s not a foregone conclusion, however. The Trump administration could strike trade deals and blunt the overall impact, for example, experts said.
“But if that doesn’t happen, the market may still be a long way from the bottom,” Thomas Mathews, head of Asia-Pacific markets at Capital Economics, wrote in a note on Monday.
The scope of the stock sell-off
The S&P 500 shed almost 11% in the two days of trading ended Friday.
It was the worst two-day stretch for the U.S. stock benchmark since March 12, 2020 — in the early days of the Covid-19 pandemic — and the fourth worst since 1950, according to Callie Cox, chief market strategist at Ritholtz Wealth Management.
Stocks briefly entered “bear market” territory — meaning they’d fallen 20% from their recent peak — during trading on Monday before paring some of those losses.
Source: https://www.cnbc.com/2025/04/08/why-the-stock-market-hates-tariffs-and-trade-wars.html