Wall Street Rejects Trump Administration's Tariff Defense, Stocks Resume Slide

Barry Adams
07 Apr, 2025
New York City

Stock market indexes on Wall Street opened sharply lower as key trading partners signaled they would announce their list of tariffs on U.S. goods.

The S&P 500 index declined as much as 3%, and the Nasdaq Composite fell 4% after the Trump administration offered a vigorous defense of tariffs and failed to calm market nerves.

The alphabet soup of tariffs continues to grow and now includes base tariffs, reciprocal tariffs, sector tariffs, and country-specific tariffs.

Moreover, the Trump administration signaled the release of additional tariffs as early as this Wednesday.

The Trump administration went on the media offensive and added that tariffs are likely to create minor pain for U.S. consumers and businesses in the short term, but they will create jobs in the long term and support the revitalization of the manufacturing sector.

Despite the rosy claims promoted by Treasury Secretary Scott Bessent, automakers, home builders, food stores, apparel and home goods retailers, electronic gadgets and appliance stores, and DIY stores plan to raise prices between 10% and 50% as early as this month.

 U.S. automobile makers are preparing to hike prices between $3,000 and $12,000 as early as next week, and food prices are expected to jump higher between 15% and 30%. 

In addition, U.S. home construction costs are expected to jump at least 20% after the implementation of tariffs on goods from China, the European Union, and Canada.

The Nikkei 225 Stock Average in Japan plunged 8%, its third-worst decline in index points, and the Hang Seng index plunged a whopping 13% as worries of global recession mounted. 

Markets in Europe plunged more than 3% and extended a 3-day decline to more than 12%, amid fears that the European Union and Canada will join China in announcing their retaliatory tariffs as early as next month. 

The S&P 500 index is now down about 17% from the recent peak in mid-February, and the Nasdaq Composite extended its losses over the period to more than 20%. 

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index decreased 3.1% to 4,916.99, the Nasdaq Composite edged down 3.1% to 15,096.48, and the Russell 2000 index was down 4.3% to 1,748.58.

The yield on 2-year Treasury notes edged lower to 3.65%, 10-year Treasury notes increased to 4.06%, and 30-year Treasury bonds advanced to 4.50%.

WTI crude oil decreased $1.53 to $60.42 a barrel, and natural gas prices edged higher by $0.005 to $3.84 a thermal unit.

Gold decreased by $13.45 to 3,023.65 an ounce, and silver edged up by $0.57 to $30.14.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.07 to 102.96 and traded at a two-year high.