US stocks plunged in after-hours trading after President Donald Trump announced broad tariffs starting at 10 percent — with much higher rates for certain countries.
Within minutes of Trump's announcement, futures tracking America's flagship S&P 500 fell two per cent, while the Nasdaq dropped three per cent — the kind of falls not seen since the start of the pandemic.
The sharp selloff followed Trump's fiery remarks, in which he accused foreign nations of 'ripping off' the United States and vowed to impose tariffs on imports across the globe. The tariffs were higher than expected.
Wall Street fears the move will stifle economic growth, drive up inflation and further rattle global stock markets when trading resumes in Asia and Europe on Thursday.
Most Americans' retirement savings, including 401(K)s, are tied to stock market performance. They are invested in shares and funds that track the major indices.
At 6.30pm in after-hours trading in New York, futures that track the S&P 500 were down 2.3 percent, while one that is tied to the Nasdaq-100 fund dropped 4.2 percent. A fund that follows the Dow Jones slipped 2.3 percent.
Stocks of major importers took a hit late Wednesday. Nike plunged 6 percent, and General Motors fell 3 percent. Companies already struggling amid tariff concerns, like Nvidia and Tesla, each lost about 3 percent. Five Below dropped 11 percent, while Gap tumbled 12 percent.
Although Wall Street's main trading sessions ends at 4pm in New York, traders can continue buying and selling regular stocks until 8pm in after-hours trading.
Beyond that, investors can trade futures contracts around the clock, except for a one-hour break starting at 5pm each day. Futures track the prices of major indexes like the S&P 500, Nasdaq, and Dow Jones, as well as gold and other commodities.
Americans will have already seen their retirement funds take a hit based on after-hours trading and futures. If prices don't recover, they'll face a bigger blow when markets open at 9.30am in New York on Thursday.
The US President said his 'liberation day' announcement was a 'declaration of economic independence'.
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