P.M. Edition for April 3. U.S. markets experience their steepest declines since 2020, as investors grappled with the impact of President Trump’s new tariff plan. WSJ reporter Hannah Erin Lang joins to discuss. Plus, amid a broader selloff, investors turn to consumer staple stocks. We hear from Journal reporter Stephen Wilmot about which kinds of stocks have emerged as winners. And the U.S. dollar fell today, catching analysts by surprise. Heard on the Street columnist Jon Sindreu tells us what that means for the U.S.’s economic future. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What triggered the recent U.S. stock market plunge?
U.S. stocks plunge, losing more than $3 trillion in market value. Plus, why amid a market sell-off, investors are turning to consumer staple stocks. And what a weaker dollar means for the U.S. 's economic future.
What investors are realizing today is that the growth prospects of the U.S. are deteriorating.
It's Thursday, April 3rd. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News? The top headlines and business stories that move the world today. U.S. stocks have suffered their biggest single-day wipeout in market value since the COVID route in March 2020. Dozens of household name stocks posted double-digit declines, including HP, Nike, and Target. The U.S.
dollar sank, oil and gold both fell, and investors dashed for the safety of treasuries. The decline sets up financial markets for one of their most precarious periods in recent years, as the tariffs and the international reaction test the faith investors used to stick with stocks. The Dow fell more than 1,600 points, or about 4%. The S&P 500 slid about 5%.
And the Nasdaq was down more than 1,000 points, ending the day roughly 6% lower. All in all, U.S. stocks have lost roughly $3.1 trillion in market value. For more, I'm joined by WSJ Markets reporter Hannah Aaron Lang. Well, Hannah, what a day it's been for the markets. What happened here today?
It's fair to say that today was kind of a bloodbath for markets. We certainly got hints that that was coming. Stock futures started to turn lower last night after President Trump's speech. But this was really quite a dramatic day. We saw the S&P 500 fall a lot. We saw the Nasdaq notch its largest one-day point decline on record. Treasury yields fell. The dollar fell.
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Chapter 2: How did President Trump's tariff plan affect the markets?
So there was turmoil in almost every corner of the market. And of course, what's driving this is professional investors and businesses just scrambling to adjust their plans and their strategies in response to what one analyst called a worst of the worst case scenario when it comes to the president's tariff plans.
I mean, there's so much that happened and so many things were affected, but I'm curious what stood out to you.
This is something we've been monitoring for a while, but it was definitely cast in very stark terms today. The Magnificent Seven, these large cap tech stocks that were on top of the world for a while. They suffered some really big losses today. The Roundtail Magnificent 7 ETF that tracks all of those as a group, it was down about 7%.
Amazon and Apple were some of the biggest losers, around 8% or 9% losses today. But also, I was just really surprised by the depth and breadth of these losses. As I mentioned, there wasn't really a part of the market that wasn't touched by this at some point today.
Okay, lots of pain for investors today. Is it over now? What happens next?
Today might have been more intense than the days to come. This was the initial reaction, investors grappling with this plan that was much more severe than they had anticipated. But what I'm hearing from the sources that I talk to, whether they're professional portfolio managers or just investors,
individual investors, is that this volatility, these up and down days seem to be something that's going to stick around just because of the potential impact of this plan. So this is definitely not the end of the effects that we're going to see from this plan. And unfortunately, not the end of what I expect will be continued volatility for investors as well.
That was WSJ reporter Hannah Aaron Lang. Hannah, thank you for being here.
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Chapter 3: Which stocks are considered safe during market sell-offs?
Thank you so much for having me.
Amid today's broader sell-off, some stocks fared better than others. I'm joined now by WSJ reporter Stephen Wilmott. Stephen, what kinds of companies saw their stock price rise today?
In the European trading morning, we got, for example, the drinks makers Diageo and Campari. Their stocks rose because there had been fears that their Mexican tequila imports to the US, which account for quite a dominant chunk of the US businesses these days, would be hit by tariffs because of the current exemption for US MCA compliant goods.
That's goods that comply with the free trade area rules in North America. that that exemption would end. And so the fact that it wasn't led to a bit of a relief for some sectors. Another one was pharma because pharmaceutical products were exempted.
As the trading day has evolved, that's changed a bit because the liquor companies have started to trade down and that's because a consensus is starting to build that actually these tariffs could be recessionary. And obviously, that's not good for liquor companies. But pharmaceuticals are a traditional safe haven trade because people continue to buy drugs even in recessions.
I'm also seeing the share price go up for companies like Philip Morris, Nestle, InBev. What do they have in common?
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Chapter 4: Why are consumer staple stocks performing well amid a sell-off?
These are often considered consumer staples. They sell goods that people tend to buy, whether in good times or in bad. Nestle sells pet food, formula, coffee, so things that people won't stop buying in a recession. Philip Morris, obviously, cigarettes, a classic recession trade. And Anheuser-Busch beer, Budweiser, which is considered a bit more of a staple product.
alcoholic drink than tequila, for example, which goes into high-end cocktails that you might consume in bars. So investors rotate into these consumer staple stocks in anticipation of a recession, in anticipation of consumers trading down into cheaper, more basic product categories.
Some of the companies that started the day down quite a bit, including Nike, now they're starting to perhaps not look quite so much like anomalies, right?
Yes, a sea of red at the moment. It started the day with a slightly more nuanced reaction, I would say. Adidas in European trading was one of the big losers early on in the European trading day, following Nike in post-market trading in the US. And that's obviously because they imported a lot of shoes from Vietnam and Vietnam got hammered with particularly high reciprocal tariff.
And Southeast Asia was, in general, the kind of big loser from the announcements. But then as the day is built, the stock market pain has spread, essentially, and the recession trade is built so that everything that is generally macroeconomically sensitive has started to sell off. So bank financials, property stocks, things that have nothing to do with tariffs.
That was WSJ reporter Stephen Wilmot. Thank you, Stephen.
Thank you.
Canadian Prime Minister Mark Carney said today that his country would match President Trump's auto tariffs with 25 percent tariffs of its own. The levy would be on U.S. vehicles that are not compliant with the U.S.-Mexico-Canada trade pact. He said the counter tariff would apply only to finished vehicles and wouldn't affect vehicle content from Mexico.
Carney said the tariff could raise up to the equivalent of about 5.6 billion U.S. dollars, which would be used to help workers and companies affected by the Trump tariffs. The Canadian prime minister also told reporters at a press conference that President Trump's tariff order will rupture the global economy and increase the risk that the U.S. will fall into a recession.
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