Stock Market

Market Mayhem: Trump’s Tariff Threats Ignite Stock Market Turmoil

Published

3 days ago

May 26, 2025

U.S. stock markets experienced significant turmoil on May 23, 2025, as President Donald Trump announced potential tariffs of up to 50% on European Union imports and a 25% tariff on Apple iPhones not manufactured in the U.S. This unexpected escalation in trade tensions sent shockwaves through Wall Street, leading to widespread declines across major indexes.

Key Takeaways

President Trump proposed a 50% tariff on EU imports, effective June 1.
Apple shares fell 3% after Trump threatened a 25% tariff on iPhones made outside the U.S.
All three major U.S. stock indexes closed lower, marking a weekly loss.
The CBOE Volatility Index, known as Wall Street’s “fear gauge,” spiked to a two-week high.

Market Reaction to Tariff Announcements

The announcement of new tariffs reignited fears of a trade war, causing the Dow Jones Industrial Average to drop by 256 points (0.61%), the S&P 500 to fall by 39 points (0.67%), and the Nasdaq Composite to decline by 188 points (1.00%). This marked a significant downturn, with all three indexes shedding more than 2% for the week.

Dow Jones: 41,603.07 (-0.61%)
S&P 500: 5,802.82 (-0.67%)
Nasdaq: 18,737.21 (-1.00%)

Specific Company Impacts

Several companies were notably affected by Trump’s tariff threats:

Apple: Shares fell 3% after Trump warned of a 25% tariff on iPhones not made in the U.S.
Deckers Outdoor: The company saw a staggering 19.6% drop in stock price after it failed to meet sales expectations, citing tariff-related uncertainties.
Ross Stores: Shares plummeted 11.1% after the retailer withdrew its full-year financial guidance due to anticipated tariff impacts.

Broader Economic Implications

The renewed tariff threats have raised concerns about the potential for a recession, with analysts noting that the market’s reaction indicates increased odds of economic downturn. Treasury yields also fell, reflecting investor anxiety about rising debt levels and the implications of Trump’s tax cuts, which could add nearly $4 trillion to the national debt.

10-Year Treasury Yield: Dropped to 4.51% from 4.54%
Gold Prices: Increased by 2.1% as investors sought safe-haven assets amid market volatility.

Conclusion

As the market grapples with the implications of Trump’s latest tariff threats, investors are left to navigate a landscape of uncertainty. The potential for further escalations in trade tensions looms large, and analysts warn that the volatility may persist as negotiations with the EU and other trading partners continue. The situation underscores the fragility of the current economic recovery and the significant impact of trade policy on market stability.