Yahoo Finance

Trump's tariffs pummel markets as the NASDAQ and S&P 500 see their biggest one-day loss since 2020. Yahoo Finance's Josh Schafer joins us now with the trading day takeaways, Josh.

Josh, it was a brutal day in the stock market. There's no other way to put it. And what I want to take a look at here is just sort of run through exactly what we saw and some key stats, as you were just listing there. So, you did mention NASDAQ Composite saw its worst day since 2020. So, we'll move to an intraday, just so we get that nice round number, down almost 6% for the NASDAQ Composite. Then you take a look at the S&P 500, that fell almost 5% today. Then we go over to the Dow, the Dow fell nearly 1700 points today. This is the fifth biggest point drop we have seen for the Dow Jones Industrial Average. Now, I think if you zoom out to a three-day on some of these, what you're going to see here, remember, stocks have been up a little bit coming into the tariff announcement. What this tells you

markets had no idea this was coming. Right? Mark Investors were not positioned for the level of tariffs that we got from Trump. I think even perhaps you could argue investors were maybe positioned for, "Okay, we get a little certainty. Maybe we get a

But to your point, we were firming up into that.

Maybe we get a little bit of a bounce, right? And that is just simply not what happened. I want to look to at exactly where we saw a lot of the selling. It is, of course, where we've seen a lot of the selling over the last month. Look at your magnificent seven names. Apple down over 9%, Amazon also down about 9%, meta 9%. This cohort, Josh, lost about a trillion dollars in market cap today alone. It was just a brutal, brutal sell-off. You see a little bit of green, some safety plays like a Costco, but generally speaking, there were not a lot of places to hide in this market today.

So today, so the strats just start, they start pumping out their notes. They're telling clients, you know, what to make of this, how to navigate this, what to do with their money. Did you hear anybody? Did you see anybody saying, "Buy this. Move in, buy this. The worst is in the rearview mirror."

There is a lot more people talking about how much further stocks could fall than coming in and buy the dip right now. And I think that's a clear shift of what we've seen from strategists really over the past 18 months at this point, right? There's been plenty of little scares in this market where people have said, "You know what? Let's flip this to a 52-week high so you can see how far off these stocks are from 52-week highs." There's been plenty of times where people say, "Nvidia, 30% off a 52-week high, I like it here. Let's jump in and start buying. Let's start buying some of these MAG 7 names off over 20% from their all-time highs." That that crowd is just quiet right now. Really, what the strategist conversation is is I'm wondering how close we're getting to my bear case. I'm starting to think maybe the S&P 500 finishes the year around 5,500 where we are right now. The key to that being, Josh, what do we hear from other countries and how do these negotiations go?

Yeah, do they negotiate or retaliate, right?

Strategists are essentially saying what we learn about these negotiations over the next week could be the key for whether we have more downside or potentially there is room to find a bottom here.

All right, Schafer, bullet point number two.

Bullet point number two, Josh, is really about what this tariff discussion is sort of centering around, right? So tariffs are expected to raise inflation, lower growth. What economists are arguing is that growth fears are going to be the bigger part of this story. So you heard Chair Powell talk about the inflation impacts of this, perhaps being transitory, meaning there'll be a one-time pass-through. Well, if growth starts to lag, growth doesn't just fall for a quarter and then come right back up, right? If we start rolling into some sort of recession, that would continue. So what you saw play out today in markets, we now have investors pricing about four interest rate cuts from the Fed. This is down for, or sorry, up from about two or three. And again, not really for good reasons. If the Fed is cutting because the economy is slowing, that's not typically a welcome sign for stocks. So again, that's just where people feel like this could be headed. We got the tariff announcements yesterday. It's not like the entire economy changed this morning. We still need a lot of this to play out and start seeing more data, but it's clear in the last 24 hours economists feel like the risks of recession have certainly

And you look at that 10-year, that would seem to suggest recession fears outweighing inflation figures.

Down 15 basis points today to 4%.

Tomorrow, jobs report. What's in there? What do you expect?

Yeah, so the jobs report for March, again, isn't supposed to include a lot of the things we just discussed. So we're looking for about consensus 140,000 payrolls added, unemployment rate flat at 4.1%. Again, I think the big fear now would be if the unemployment rate were to start ticking up before we even have a lot of the impacts from this Trump policy, that would be a concern for markets. And we just showed how growth fears are weighing on the market. I do not think a below consensus report tomorrow is going to be a good sign.

Yeah, cooling but not crashing. That's been the mantra for the labor market. But now, to your point, all this uncertainty.

It's it's been the steady eddy of the economic data thus far. So we have to see if it holds up again.

We shall. Thank you, Josh.