Investors dusted off their bear-market playbooks after stock prices swooned Thursday, triggered by the imposition of tariffs on nearly all imports.
President Trump followed through on threats to impose higher taxes on foreign products with the aim of rectifying trade imbalances, shoring up American manufacturing and raising new revenue for the federal government. But the tariff news also raised the spectre of higher inflation and slower economic growth in the months if not years ahead.
Stocks tumble, with big tech companies leading the retreat
Some of the worst-hit stocks were the same giant technology companies that propelled the market to new heights toward the end of 2024. These included the "Magnificent Seven" giants, all of which lost ground during the day. Apple, Amazon and Meta, the parent of Facebook, all saw their shares slip 9% or more during the day, with worries over consumer spending also playing a role. Magnificent Seven companies Tesla and Nvidia didn't fare much better, each suffering a daily loss of nearly 8%.
A mixed bag for Arizona stocks
Many Arizona corporations weren't immune from the Wall Street carnage. Shares of Microchip Technology, the Chandler-based semiconductor manufacturer, fell nearly 17%, while On Semiconductor slipped 12.8% and copper giant Freeport-McMoRan tumbled 12%.
But used-car retailer Carvana took the biggest hit among larger Arizona companies, with a slide of just under 20%. Carvana's largest shareholder, Ernest Garcia II, lost more than $2 billion for the day, according to Forbes, which still ranks him as the wealthiest Arizona resident.
Conversely, the shares of some Arizona companies such as trash hauler Republic Services and utility parent Pinnacle West Capital were flat or slightly higher, while Tempe-based First Solar up nearly 5%.
The stock market is now in correction territory
With the daily loss the Dow Jones Industrial Average, which tumbled 1,679 points or nearly 4%, now stands 10% below were it peaked in December. The broader Standard & Poor's 500 index has retreated 12.2% from its previous highs. Drops of 10% signify what investors call "corrections," while bear markets are measured by slumps of 20% or more.
Most investors don't hold full-stock portfolios but, instead, add bonds, cash and other assets to the mix. That suggests most people didn't suffer as much as the declines flashed by the Dow, S&P 500 and other indexes. Nor are sharp market drops unusual. Investment researcher Morningstar has identified 19 "crashes" of at least 19.6% over the past 150 years.