*

All three benchmarks slump after Trump tariffs

announcement

*

Apple ( AAPL ) leads declines among Big Tech

*

Retail stocks sink on Asia tariff worries

*

Wall Street fear gauge hits 3-week high

(Updates to closing prices)

By David French

April 3 (Reuters) - Wall Street benchmarks slumped on

Thursday, ending with the largest one-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.

Investors fled from risky assets, seeking the safety of

government bonds, after Trump slapped a 10% tariff on most U.S.

imports and much higher levies on dozens of other countries.

The tariffs, poised to disrupt the global trade order,

highlight a stark shift from just a few months ago when the

promise of business-friendly policies under the Trump

administration propelled U.S. stocks to record highs.

Investors sold positions to reflect the new economic

reality, with concerns about how other countries would react to

Trump's Rose Garden proclamations.

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.

The coming days are expected to be volatile, as events

unfold and the full effect of Trump's economic actions start to

feed through into the wider economy. The CBOE Volatility index

, known as Wall Street's fear gauge, touched a three-week

high.

"There are still a lot more questions than answers out

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

Jefferies Financial Group.

According to preliminary data, the S&P 500

lost 275.05 points, or 4.85%, to end at 5,395.92 points,

while the Nasdaq Composite dropped 1,053.60 points, or

5.99%, to 16,547.45. The Dow Jones Industrial Average

fell 1,682.61 points, or 3.98%, to 40,542.71.

High-flying technology stocks suffered big declines after

pushing Wall Street to record highs in recent years.

Apple ( AAPL ) sank, reeling from an aggregate 54% tariff on

China, the base for much of the iPhone maker's manufacturing.

Nvidia ( NVDA ) slumped, as did Amazon.com ( AMZN ).

U.S. stocks have lost ground since Trump took office in

January, with the S&P 500 and the Nasdaq dropping 10%

from record highs last month, marking a correction, as investors

priced in the economic damage from the tariffs.

Traders are ramping up expectations for the Federal Reserve

to cut interest rates four times this year, starting with a

quarter-point cut in June.

"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 on a raft of new tariffs on major production hubs

including Vietnam, Indonesia and China.

Big banks such as Citigroup ( C/PN ) and Bank of America ( BAC )

, which are sensitive to economic risks, fell, as

did JPMorgan Chase & Co. ( JPM )

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

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.

Exxon Mobil ( XOM ) and Chevron ( CVX ) fell, as crude

prices slumped 6.8% on the tariffs and OPEC+

speeding up output hikes.

Consumer staples was one of the few bright spots.

The sector is traditionally considered a defensive play, but it

was also buoyed on Thursday by Lamb Weston ( LW ), which gained

after reporting earnings.