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All three benchmarks slump after Trump tariffs

announcement

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Indexes down: Dow 3.98%, S&P 500 4.84%, Nasdaq 5.97%

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Biggest one-day falls on all three since 2020

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Apple ( AAPL ) leads declines among Big Tech

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Russell 2000 also has worst day since June 2020

(Adds closing prices)

By David French

April 3 (Reuters) - Wall Street benchmarks slumped on

Thursday, ending with the largest single-day percentage losses

in years, as U.S. President Donald Trump's sweeping tariffs

ignited fears of an all-out trade war and a global economic

recession.

A combined $2.4 trillion in stock market value was wiped off

of S&P 500 companies, as the benchmark suffered its largest

one-day percentage decline since June 2020.

The Dow Jones Industrial Average has also not had a

worse one-day collapse since June 2020, while the Nasdaq

Composite posted its largest percentage decline on any day since

the coronavirus pandemic sent global markets into a tailspin in

March 2020.

The trigger was Trump's 10% tariff on most U.S. imports

and much higher levies on dozens of other countries, which

threaten to unleash a global economic upheaval.

Investors sold positions to reflect the new economic

reality, with concerns about how other countries would react to

Trump's proclamations from the White House.

China vowed retaliation, as did the European Union, which

faces a 20% duty. South Korea, Mexico, India and several other

trading partners said they would hold off for now as they seek

concessions before the targeted tariffs take effect on April 9.

Wild swings are expected in the coming days: the CBOE

Volatility index, known as Wall Street's fear gauge,

closed above 30 points for the first time since August.

"There are still a lot more questions than answers out

here," said Steven DeSanctis, small and mid-cap strategist at

Jefferies Financial Group.

The S&P 500 lost 274.45 points, or 4.84%, at

5,396.52 points, while the Nasdaq Composite dropped

1,050.44 points, or 5.97%, to 16,550.61. The Dow Jones

Industrial Average fell 1,679.39 points, or 3.98%, to

40,545.93.

The tariff-triggered bloodbath on Wall Street stood in

stark contrast to the initial optimism after Trump's reelection

in November, when the promise of business-friendly policies

propelled U.S. stocks to record highs.

High-flying technology stocks, which had helped push

benchmarks to record highs in recent years, suffered heavily on

Thursday.

Apple ( AAPL ) sank 9.2%, its worst one-day performance in

five years, reeling from an aggregate 54% tariff on China, the

base for much of the iPhone maker's manufacturing. Nvidia ( NVDA )

slumped 7.8%, and Amazon.com ( AMZN ) dropped 9%.

Traders are ramping up expectations for the Federal Reserve

to cut interest rates.

"The Fed does have considerable firepower to help the

market," said George Bory, chief investment strategist for the

fixed income team at Allspring Global Investments.

"The market is now pricing in more rate cuts, and perhaps

sooner," adding an easing in June now seemed guaranteed, with

the chance of a cut in May as well.

That heightens the significance of Friday's payrolls data

and Fed Chair Jerome Powell's speech the same day, which could

offer crucial insights into the U.S. economy's health and the

future path of interest rates.

Retailers were hit hard, with Nike and Ralph Lauren

falling 14.4% and 16.3%, respectively, on a raft of new

tariffs on major production hubs including Vietnam, Indonesia

and China.

Big banks, which are sensitive to economic risks, fell.

Citigroup ( C/PN ), Bank of America ( BAC ), and JPMorgan Chase &

Co ( JPM ) all dropped between 7% and 12.1%.

The U.S. small-cap Russell 2000 index tumbled 6.6%,

its worst one-day drop since the pandemic's onset, underscoring

concerns about the health of the domestic economy.

"Small-cap companies tend to be suppliers to the large-cap

companies, so as things go bad for the large-cap names because

of tariffs, they are going to put a lot of pressure on their

small-cap suppliers," said Jefferies' DeSanctis.

The energy index sank 7.5%, the heaviest decliner

among the 11 S&P sectors, as crude prices slumped

6.8% on the tariffs and OPEC+ speeding up output hikes.

The one sector not in the red was consumer staples

, which gained 0.7%. Traditionally considered a

defensive play, it was also buoyed on Thursday by Lamb Weston ( LW )

, which advanced 10% after reporting earnings.

Volume on U.S. exchanges was 20.90 billion shares, compared

with the 16.13 billion average for the full session over the

last 20 trading days.