Instant Reaction: Trump Tariffs Trigger Stock Market Meltdown
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Almost nothing was spared here on this Thursday afternoon, the first full day of trading once we learned about the new U.S. tariff regime. An S&P 500 that is going to close the day lower by about 4.8%. That's the worst day for the index going back to June of 2020. It pushes the S&P 500.

back into correction territory, down 12% from its all-time high, 53.96, and change is where it settles on the day. The Dow Jones Industrial Average lost more than 1,600 points on the day, taking it down by 4% on

on the day. The Nasdaq Composite, down 1,000 points, or 6%. The Nasdaq 100, down 1,000 points, or 5.4%. The Russell 2000, down more than 100 points, or 7%. S&P 400 mid-caps, down 7%. Dow Transports, down 9%.

I know, Alex, you like to look at the equal weighted index. I do. That was underperformer relative to the S&P, down 4.8%. Not just tech. Yeah. Yeah. Just across the board. Unbelievable. I don't even know that I should even mention how many are down in the S&P, but I'll go there.

You've got 407 names losing ground. You do have 95 names, Tim mentioned some, hitting 52-week highs in the S&P, but 95 names, Alex, higher in the S&P 500. Yep, taking a look at that IMAP function really crystallizes the move that we're seeing within the equity market today.

sectors in the red except for consumer staples as we just talked about those are the kind of the only gainers some hitting 52 uh weak highs but energy tech discretionary and industrials and financials all getting hit extraordinarily hard i mean energy sector's off by over seven percent and just to add to those superlatives the kvw bank index down 10 the biggest drop going back to march of 2023 the philadelphia semiconductor index carol and tim had their worst day

since March of 2020, down 9.9%. Yep, dollar wiping all of its gains out since the president's win on November 5th, that election win. So yeah, a lot of superlatives, no doubt about it, on this Thursday. I actually found some gainers, guys, and let's go to it. We were talking about certainly the consumer staples area, which was an outperformer easily, the group overall. Coca-Cola among that list, up

2.6% here in today's session. So that was gaining another consumer staples. Philip Morris, that one was up just shy of 4% here at the close. And then actually some fundamental reasons, or at least something that could possibly change maybe the outlook for Intel. This went up at its highest

almost 9% today, finishing with about a 2% gain at the close. The information coming out and reported that the company tentatively agreed to a chip-making joint venture with TSMC, Taiwan Semiconductor Manufacturing. Bloomberg News, you might remember, back in February, reported that the companies were talking about the idea at the request of the Trump administration. And in this one, the number one gainer in the S&P 500, French fries. Yep, got to love it. Lam Weston Holdings up 10% here at

the close. The company came out and it posted fiscal third quarter results, topped estimates, and the management hired a consulting firm to look for cost savings. So even in a sell-off, guys, fundamentals still do matter. And can I just add an honorable mention to there? And it's actually on a country basis. Actually, the Mexico's main benchmark index actually had staged a pretty decent rally earlier in the day. It ended up flat on the day. And you actually saw some indices in Canada rally, largely because of the fact that

they did not get the worst of those reciprocal tariffs, if you will, that Trump laid out yesterday. All right, well, let's go to some of the decliners. I had the easy job today. And in fact, there were so many decliners, I went with an entire index, the Bloomberg MAG-7 total return index falling by 6.7%. Its worst day in more than three years, everything in there in the red, Apple down more than 9%, Amazon and meta platforms down 9%, NVIDIA down close to 8%.

8%. Tesla down 5.5%. Alphabet down 4%. Microsoft down 2.4%. All the biggest weights on the major indices and all among the most actively traded stocks today. Also, did want to focus on retail today because we saw some deep, deep moves there. Nike falling by 14.4%. In fact, it's now trading at

at the lowest level going all the way back to 2017. It was among the U.S. and European sneaker clothing and jewelry makers that plunged amid this shock to supply chains. Vietnam is the issue for Nike. It's the largest supplier of footwear for Nike today. Half of Nike brand shoes are made in Vietnam. Nike also faces additional challenges because it's so dominant in the U.S., which is the world's biggest single sports market.

And finally, another retailer, RH, plunging. The worst day ever. The parent company of Restoration Hardware, they plunged as much as 45 percent. A record decline, this after the annual revenue growth forecast trailed Wall Street expectations. Fourth quarter sales and profit also missed the average analyst estimate. Trading now at levels last seen in 2020. Shares falling today by more than 40 percent. Where do you go? You go to Lamb Weston and you also go to the bond market.

It was the front end that really outperformed here. The two-year yield at one point was down by about 17 basis points. It fell the most since August of 2024, and we're now at the lowest level since October, so before the election. But overall, guys, we're looking at a 21 basis point move to the downside for the two-year market.

in just these four days alone, not even taking into account what we're going to see tomorrow with the jobs number. It was interesting, too, if you were looking for any bright spots. I mean, you saw a lot of health care stocks move higher. Of course, again, that defensive trade, in fact, that managed health care index, the one that tracks the ones in the S&P.

I had a really good day. And it gets to that question as to if you do want to stay invested, you want to keep that money there, where do you go? I mean, is there a safe spot out there right now other than, you know, consumer staples and health care? I don't know. It's a good question, right? And I also do wonder if you do move that money at this point, you know, with what certainty or what will it take for you to get more actively back

into the market at some point. Certainly, again, you go back to so much coming out of the White House, so much coming out of Washington, and we know that this stuff can change. And so when do you believe that, okay, this is the policy, this is what stays in place? And I think that's what's going to continue to make it tricky, certainly for investors and businesses. Can I just add, though, too? I'm sorry to interrupt.

but just on the consumer staples front, because I think a lot of people were flocking there. You saw the rally in Pepsi and some of those names. But then you had the CEO of ConAgra, who was talking a little bit earlier today, who really talked about how he's concerned. He said right now they're not being hurt. Right now they don't have to make a lot of changes. But he basically said that, you know, once the dust starts to settle here...

you know, things may not look good. And he actually talked about this idea of not really being able to give firmer guidance. And that might be the story of this earnings season, which really kicks off in just about four or five days. Yeah, we'll certainly look forward to hearing from the executives of those companies and certainly the commentary from the banks about how consumers are doing. In the meantime, Romain, your question about where actually to invest your money is a question we've been posing to our guests throughout the day. We did speak to Mace McCain over at Frost Advisors.

who's actually not buying the trade of going to Europe right now. He thinks that's going to end very soon and it's going to end poorly. He's sticking with U.S. companies, but mid caps because they have less exposure to international markets. He's still bullish on the U.S. in the long run. But does that take into account economic slowdown, though? Yeah. I mean, look, he's staying invested right now. He's getting a lot of calls from clients. They're obviously very concerned. They want explanations of what's happening to the market. But he's staying invested.

Well, here's my thing, too. In the short term, though, I wonder if we're going to see a lot more downside in that when you have volatility spikes like this, guys, up to nearly 30 for the VIX, you have funds that rebalance, whether you're looking at ETFs or ETNs or whether you're looking at, say, CTAs, commodity trading advisors, or you're looking at volatility funds. They have to rebalance when volatility spikes and they have to sell stocks. That's on a long term call, right?

But that churn could continue through the next couple of days as they're forced to kind of rebalance here. Actually, we put that question to Peter Atwater over at William & Mary. You know, he's worked on Wall Street. He's now in academia, runs his own investment firm as well. And we said, you know, especially with the S&P 500 from peak to trough,

Down more than 10%, was it? Almost 12%. So was this a bear market? Could it go lower? And his expectation was that, yeah, he thought things could actually go lower from here. So I think that's a really good point. Have we bottomed out? And that's the question. All right. Dot, dot, dot. Dot, dot, dot.

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