Dow Jones sinks 1,600 points, S&P down nearly 5%; Asian stocks also fall as markets feel tremors of Trump’s tariffs

The US markets reacted negatively, a level unseen since the COVID-19 pandemic, after President Donald Trump imposed tariffs on trading partners.

The S&P slid 4.84% to settle at 5,396.52, its worst one-day fall since 2020. The Dow Jones Industrial Average sank 1,670 points, or 3.98%, to end at 40,545.

The Nasdaq slipped 5.97% or 1,050 points to 16,550.

US small-cap stocks were among the worst hit, with the small-cap benchmark Russell 2000 entering the bear market, closing 6.59% lower at 1,910.55.

Asian shares also fell after the US stock market rout. Japan's Nikkei 225 index is down 2.37% or 824.25 points, while Singapore's Straits Times index dropped 1.64% or 64 points to 3,877.

GIFT NIFTY suggests a negative opening for Indian markets.

GIFT NIFTY is down 114 points, or 0.37%, to 23,230, suggesting a lower start for the Indian stock markets.

US President Donald Trump on Wednesday imposed at least a 10% tariff on imports, with higher levies for countries like China, India, and the European Union.

"This is one of the most important days... in American history; it's our Declaration of Economic Independence. For years, hard-working American citizens were forced to sit on the sidelines... But now it's our time to prosper," Trump said.

"India, very, very tough. Very, very tough. The Prime Minister just left. He’s a great friend of mine, but I said, ‘You’re a friend of mine, but you’re not treating us right. They charge us 52%. You have to understand, we charge them almost nothing for years and years and decades, and it was only seven years ago, when I came in, that we started with China," he said.

The highest reciprocal tariff was imposed on Lesotho (50%) and Saint Pierre and Miquelon (50%), while the lowest is on the United Kingdom and Brazil at 10% each.