Market Update for April 4, 2025
Market update April 4, 2025
The U.S. stock markets experienced significant volatility and a sharp downturn, driven primarily by escalating trade tensions following President Donald Trump’s tariff announcements. The week began with some resilience as markets attempted to shrug off uncertainty. On Monday, March 31, the S&P 500 and Dow Jones Industrial Average closed higher, reflecting a temporary reprieve from the tariff-related concerns that had weighed on equities throughout March. The Nasdaq also saw gains, though the broader sentiment remained cautious as investors awaited clarity on Trump’s trade policies.
By Tuesday, April 1, the markets showed mixed performance. The S&P 500 and Nasdaq ended higher after a choppy session, with the Dow closing flat or slightly up, depending on the final tallies. Investors were anxiously anticipating Trump’s tariff plan, expected to be unveiled on Wednesday, April 2. This uncertainty kept markets on edge, with some optimism that the tariffs might be less severe than feared.
However, the mood shifted dramatically midweek. On Wednesday, April 2, Trump announced sweeping tariffs, including a 10% across-the-board levy on imports and rates exceeding 50% for some countries like China—far surpassing what analysts had anticipated. This triggered a massive sell-off. By Thursday, April 3, the Dow Jones Industrial Average plummeted nearly 1,700 points (around 4-5%), the S&P 500 dropped nearly 5%, and the Nasdaq entered bear market territory with a decline of over 20% from its December peak. This was described as the worst day for major indexes since 2020, erasing much of the year’s gains and pushing the S&P 500 down 8.3% year-to-date and the Nasdaq down 14%.
Friday, April 4, saw the rout deepen. The Dow shed an additional 2,231 points (5.5%), closing at 38,314.86—its largest drop since June 2020 and marking the first time it lost over 1,500 points on consecutive days. The S&P 500 fell 5.97% to 5,074.08, a two-day loss of nearly 10%, while the Nasdaq slid 5.6%, closing 22% below its record high. China’s retaliation with a 34% tariff on all U.S. products, effective April 10, intensified fears of a global trade war and potential recession. Tech stocks like Apple (-7%), Nvidia (-7%), and Tesla (-10%) were hit hard due to their exposure to China, while exporters like Boeing (-9%) and Caterpillar (-6%) also led the Dow lower.
Despite a stronger-than-expected March jobs report on Friday (228,000 jobs added vs. 140,000 expected), investors largely ignored the positive economic data, focusing instead on trade war fallout. The S&P 500 energy sector dropped 8.6% amid falling oil prices, and only 14 S&P 500 stocks ended Friday in positive territory. The week’s losses left the Dow down 4.7% year-to-date, with the broader market reflecting widespread pessimism about economic growth amid Trump’s aggressive trade stance.
In summary, this past week saw U.S. markets transition from cautious optimism to a full-blown sell-off, driven by Trump’s tariff escalation and China’s retaliation, overshadowing any positive economic signals and pushing major indexes to their lowest levels since the pandemic.