At the same moment President Donald Trump claimed his universal tariffs were sure to send the stock market rocketing upward, unbeknownst to him, the values of the world’s largest companies were falling off a cliff.
Viewers of CNBC’s broadcast of the president’s so-called “Liberation Day” speech could see this process unfolding live: the network showed the real-time after-hours stock prices for Apple (-4.5 percent), Nvidia (-3 percent), Nike (-5.7 percent), and many others on screen as Trump spoke, all of them dropping.
“From the day of my election, the stock market went up in my first term, 88 percent, with NASDAQ going up 155 percent, more than any president has ever had in any term in office by far, and I think we’re going to blow that away,” Trump said, as billions of dollars in value ticked away from the market. “Maybe the numbers won’t show, but I think they’re going to show much better than even those numbers.”
ADVERTISEMENT
Futures tied to the S&P 500 and the Nasdaq 100, indicators for the performance of the market as a whole, fell about 2 and 3.3 percent, respectively.
The tariffs the president had just announced represent an unprecedented escalation of his trade war on the rest of the globe. Trump instituted a 10% baseline tariff on all goods entering the U.S., with steeper reciprocal taxes on specific trading partners he believes have been “ripping off” the United States for years. These include a 34 percent rate for China, 20 percent for the European Union, and 46 percent for Vietnam.
Trump also announced a 25 percent tariff on all foreign automobiles and parts entering the country. In response, General Motors’ stock dropped 2.5 percent, Tesla dropped 4.4 percent, and Ford dropped half a percentage point.
Investing experts told CNBC that the stock market was likely spooked because traders had been hoping Trump’s 10 percent figure would be a cap on tariffs, not a baseline.
“If he would have come in with just the 10 percent, I think the markets would probably be up quite a bit right now,” Larry Tentarelli, chief technical strategist at the Blue Chip Trend Report, told the outlet. “But because the tariffs came in bigger than many expected, I think what that does is it creates more downside volatility right now.”
Art Hogan, chief market strategist at B. Riley Wealth Management, agreed that the scope of the new tariffs was unexpected.
“What was delivered was as haphazard as anything this administration has done to date, and the level of complication on top of the ultimate level of new tariffs is worse than had been feared and not yet priced into the market,” he said.
At one point early in the lengthy address, Trump vowed that today would be the day that American industry “will be reborn.” He promised a new “golden age.”
Not everyone agreed.
“For all of President Trump’s talk of a new golden age, this huge tax increase will inevitably result in higher prices for American families, lower growth and business investment, and diminished exports and manufacturing output,” CNBC Senior Economics Reporter Steve Liesman said after Trump’s speech. “So it is not a good forecast or a good look from the economists and the forecasters.”