Key Takeaways
- The S&P 500 plunged 4.8% on Thursday, April 3, 2025, a day after the Trump administration imposed expansive tariffs on imports from countries across the world.
- Dell Technologies shares dropped as the tariff announcement raised concerns about increased costs. Other computer-hardware makers were hit hard, too.
- Shares of potato provider Lamb Weston provided a bright spot on a bleak market day, moving higher after a strong earnings result.
Major U.S. equities indexes plummeted a day after President Donald Trump announced widespread “reciprocal” tariffs on US trading partners around the globe.
The dramatic adjustment of trade policy triggered updates to economic forecasts by many financial firms, with economists pointing to increased inflation and recession risks. The S&P 500 dropped 4.8% on Thursday, while the tech-heavy Nasdaq fell 6%, marking the heaviest daily drop for the pair of market gauges since 2020. The Dow ended the tumultuous trading day down 4%.
The tariff announcement pressured shares of companies that manufacturer technological devices, which could face higher costs in their international supply chains. Dell Technologies (DELL) stock suffered the steepest drop in the S&P 500 on Thursday, plummeting 19%. Shares of fellow manufacturer HP (HPQ) dropped 15%. Other companies involved in the creation of computer hardware took a hit on Thursday: Western Digital (WDC), a manufacturer of hard disk drives and other data storage technologies, fell 18%.
Best Buy (BBY) shares dropped 18%. Citi downgraded the electronics retailer’s stock to “neutral” from “buy,” highlighting the the likelihood of pressure on same-store sales as customers reject price increases. According to Citi analysts, the existing tariff plans on imports from China could result in a 5-percentage-point sales decline for Best Buy as consumers limit discretionary spending, suggesting significant downside risk to the company’s current guidance.
Shares of Lamb Weston Holdings (LW) bucked the downward pressure on the broader markets, jumping 10% to notch the strongest gains of any S&P 500 stock. The provider of frozen french fries and other potato products reported better-than-expected sales and profits for its fiscal third quarter, highlighting progress on its efforts to improve operational efficiency despite persistent headwinds from subdued restaurant traffic. Activist investor Jana Partners, which acquired a sizable position in Lamb Weston late last year, has been pushing for changes as the company navigates a challenging environment.
Numerous stocks with defensive characteristics, including several names in the health care sector, managed to push higher despite the turbulent market environment. Shares of insurance providers Molina Healthcare (MOH), Centene (CNC), and Elevance Health (ELV) added 7.5%, 5.9%, and 5.4%, respectively.
A shift toward stocks with a better chance of withstanding a potential recession also helped boost shares of discount retailer Dollar General (DG), which advanced 4.7%. The company could be in a good position to attract cost-conscious shoppers if an economic downturn materializes and consumer sentiment continues to deteriorate.
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