By Connor Smith | Wednesday, April 2

Tariff Time. The stock market dug itself out of an early hole today as traders bet the White House would water down its tariff plans. Boy, were they wrong.

The Dow Jones Industrial Average rose 0.6%, while the S&P 500 rose 0.7%. The Nasdaq Composite gained 0.9%. 

But right after the market closed, President Donald Trump unveiled steep tariffs he said were in response to foreign trade practices. He'd been building up the announcement as "Liberation Day."

"April, 2 2025, will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again," Trump said during an event in the Rose Garden.

A 10% tax on imports from all trading partners will go into effect on Saturday at 12:01 a.m. ET. Many individual countries will be subject to larger tariffs the White House says were determined based on trade practices.

Examples for the reciprocal tariffs include 34% on China, 46% on Vietnam, 26% on Japan, and 32% on Taiwan. You can find a sample of top trading partners below.

The White House said goods already subject to industrywide tariffs like steel, aluminum, automobiles, and auto parts, as well as goods with planned tariffs like copper, pharmaceuticals, semiconductors, and lumber are exempt from the reciprocal tariffs.

Stocks fell sharply in after-hours trading once Trump unveiled a print-out showing some of the individual trading partner tariffs. Dow futures were recently down 2.4%, while S&P 500 futures were off 3.4%. Nasdaq 100 futures were down 4.3%.

Apple stock was down 6.9% in after-hours trading. Nike shares were down 7%. Tesla shares were down 6.1%. Nvidia was down 4.9%.

Asked about the market's reaction during an interview on Bloomberg TV, U.S. Treasury Secretary Scott Bessent downplayed the importance of the after-hour moves. He was also asked about the market's moves lower in recent weeks.

"I'm trying to be Secretary of Treasury, not a market commentator," Bessent said. "The Nasdaq peaked on DeepSeek day. That's a Mag 7 problem not a MAGA problem."

You can read all of Barron's coverage of the tariffs here.

DJIA: +0.56% to 42,225.32
S&P 500: +0.67% to 5,670.97
Nasdaq: +0.87% to 17,601.05

The Hot Stock: Leidos +5.9%
The Biggest Loser: Hershey -3.3%

Best Sector: Consumer Discretionary +1.9%
Worst Sector: Consumer Staples -0.3%

The World Reacts to Trump's Tariffs

The reaction in late trading signaled that many on Wall Street were caught off guard. Wedbush analyst Dan Ives argued the tariffs Trump unveiled were worse than what the market had established as a "worst case scenario." 

Apparently they lacked imagination. Here's a selection of reactions from around the world.

Nigel Green, CEO of global financial advisory giant deVere Group:

This is how you sabotage the world’s economic engine while claiming to supercharge it. It’s a seismic day for global trade. Trump is blowing up the post-war system that made the US and the world more prosperous, and he’s doing it with reckless confidence.

Realtor.com's senior economist Joel Berner:

We know that affordability is the primary challenge for would-be homebuyers, so anything that raises the cost of homes will only exacerbate the problems in the housing market today. In addition, the broader economic uncertainty bubbling up from these tariff discussions has soured the stock market, and prospective homebuyers who had been counting on using some of their portfolio wealth to purchase a home have just seen their budgets shrink.

Australia's Prime Minister Anthony Albanese wrote on X:

Our Government will always stand up for Australia. These are uncertain times - but all Australians can be certain of this: we will always stand up for Australian jobs, Australian industry, Australian consumers and Australian values. These tariffs are not unexpected, but they are unwarranted.

Canadian Prime Minister Mark Carney wrote on X:

During this crisis, we must act with purpose and force. My government will fight U.S. tariffs, protect Canadian workers and industries, and build the strongest economy in the G7.

The Alliance for American Manufacturing was far more upbeat:

Today's trade action prioritizes domestic manufacturers and America's workers. These hardworking men and women have seen unfair trade cut the ground from beneath their feet for decades. They deserve a fighting chance. Our workers can out-compete anyone in the world, but they need a level playing field to do it. This trade reset is a necessary step in the right direction.