U.S. stocks suffered an onslaught of massive selling Thursday, spurred by what economists are saying is the heaviest tax policy on imports for the world's No. 1 economy in at least a century. The selling accelerated into the market close as the Dow Jones Industrial Average and other indexes finished only slightly above session lows on the stock market today.
The Dow Jones Industrial Average tumbled 1,679 points, or 4%, to end the day just below 40,546. It marks the worst single-session decline since June 11, 2020, when the 30-stock blue-chip gauge was gouged with a 1,861-point loss, or 6.9%, and sank to 25,128.
However, at the time, the stock market had bottomed out with follow-through days in early April. Plus, even after that major drop, the Dow Jones actually still held above its then-rising 50-day moving average.
The Nasdaq composite, obviously more heavily weighted in technology, plummeted by 6%, slipping 18% below its all-time high of 20,204. The index was down 5.8% in recent action.
Meanwhile, the S&P 500 cratered 4.8% and made eight-month lows. The benchmark index now has fallen more than 12% below its all-time high of 6,147, hitting the range of a so-called "intermediate correction."
Broad-based indexes outside the Nasdaq and S&P 500, which are both heavily influenced by mega-cap tech companies, also suffered brutal declines.
The NYSE composite, down 3.9% to 18,767, undercut lows seen in both January and March and marked a seven-month closing low. The NYSE index has now squandered its 2025 gains to fall 1.7%.
Elsewhere, the First Trust Nasdaq 100 Equal Weight exchange traded fund slid 4.9% to 116.66, closing more than 14% beneath its year-to-date high of 136.19.
Watch These News On Friday Morning
Seema Shah, chief global strategist at Principal Asset Management, noted that traders will be closely listening to a speech beginning at 8:25 a.m. PT by Federal Reserve Chair Jerome Powell and his latest thoughts on how the central U.S. bank may deal with the challenge of balancing the mandates of using monetary policy to keep the economy growing while reducing inflation to a 2% long-term rate.
"For the time being, market expectations for Fed rates have not shifted, with three cuts still expected this year. However, some forecasters have already taken out one Fed cut from their 2025 forecasts, so market pricing may begin to shift."
Also, keep an eye out for the U.S. nonfarm payrolls report due Friday before the market open.
Stock Market Today: Smaller Issues Mauled
Small caps on the Russell 2000 got roasted by sellers as the popular index dropped 6.6%. At the session low of 1,909, it had fallen 22.6% from its 52-week peak of 2,466. That signifies small caps have hit bear-market territory. The plunge in equities affirms Investor's Business Daily's current outlook since March 26 of suggesting 0% to 20% exposure in stocks.
Overall volume on the New York Stock Exchange exploded vs. average levels and was roughly 5% higher on the Nasdaq. The sharp declines in higher turnover reflected a new distribution day, or heavy institutional selling.
Beyond the stock market today, copper futures got whacked for a drop of more than 4%. Silver futures fell more than 8% to $31.84 an ounce.
As a result, investors rushed to U.S. Treasury notes in a safe-haven move. The yield on the benchmark 10-year government bond stood at 4.04% but fell as much as 15 basis points to 4% at one point. That marked the lowest level since Oct. 16, when the key bond yielded as low as 3.99%.
3:43 p.m. ET
As Market Crumbled, These Companies Showed Strength
Within the MarketSurge Growth 250 list of stocks, strength was notable in select companies including auto parts and accessories chain O'Reilly Automotive, specialty casualty and property insurer Kinsale Capital, defense supplier giant Northrop Grumman and Latin American e-commerce titan MercadoLibre.
These and a handful of other stocks rose up to 3% or more. Kinsale, forming a four-month base, rallied past an early buy point at 500.50.
Kinsale is a member of IBD Long Term Leaders. Northrop is also building the right side of a new cup-style pattern. It trades just below the cup's left-side peak of 555.57.
2:22 p.m. ET
The Economic Outlook On Trump Tariffs
James Knightley, chief international economist at ING, calculates that the range of varying tariffs for each country — from 20% for European Union countries to 46% for Vietnam, a major manufacturer of clothing and shoes — is estimated to produce around $600 billion worth of tariffs that go into federal coffers this year.
"Long-term benefits may come, but near-term pain looks certain," Knightley wrote in a comment emailed to IBD.
A long-term graph created by ING also shows that the average tariff on U.S. imports jumped to 20%, the highest level since the Smoot-Hawley Tariff Act of the 1930s. But the tariff rate is still below the 30% range seen during the 1870s and 1880s as well as the 50% to 60% exhibited for a number of years in the late 1820s to early 1830s.
IBD Leaderboard: This Insurance Play And Gold Stock Buck The Sell-Off
Knightley added that President Donald Trump's historic tariff plan "will also raise substantial tax revenue thanks to a lack of U.S.-made products that producers and consumers can substitute for. This gives President Trump the fiscal headroom to deliver on his promises for extended and expanded tax cuts later this year."
For those looking for immediate relief, the CME FedWatch tool showed only a 26% probability that the U.S. central bank will cut interest rates by a quarter point to a 4%-4.25% target range at its next meeting scheduled for May 7. The current fed funds rate charged to large banks sits at 4.25% to 4.5%.
Stock Market Today: These Dow Players Didn't Get Walloped
Meanwhile, at least a dozen of the 30 blue chip components got walloped with losses of eight points or more. But health care plays UnitedHealth, Johnson & Johnson and Amgen, all in the Dow industrials, each rose. Restaurant giant McDonald's also outperformed, rising more than 2%. Shares are up 8% for the year.
The Big Mac burger seller has a decent 85 Relative Strength Rating on a scale of 1 to 99. Shares are lifting mildly past a recent cup-with-handle buy point of 311.59. The 5% buy zone in MCD goes up to 327.17.
Looking at the big picture, the Dow Jones transportation average tumbled and hit a new low. Big drops by transportation stocks symbolize investor fear over the future of the U.S. economy.
Speaking of fear, angst among options traders also cruised higher as the Cboe Market Volatility Index jumped and reached new highs.
Further, none of IBD's 197 industry groups showed a gain on Thursday. On a price-weighted basis, at least 34 industries sank 8% or more. They included home furnishings retail, shoes, toys, fabless semiconductor, truck transport, oil and gas royalty trust, oil drilling and fiber-optic telecom.
Trump Tariffs Trigger Biggest Sell-Off Since 2020
12:38 p.m. ET
Mag Seven Suffering
Apple, which does huge business across Asia and is scrambling to invest in domestic manufacturing capacity, slumped more than 8%. Shares hit an eight-month low earlier in the session, falling more than 10%.
Meta Platforms, another member of the Magnificent Seven, was finding buying support near its 200-day moving average for weeks. But it completely lost that support on Thursday. Watch to see if Meta, the owner of the Facebook and Instagram social media platforms, can rally back near its 200-day line, which has risen from 528 at the start of the year to 577.38.
After an excellent run-up and long period of new highs, the best growth stocks tend to come down near their 200-day lines amid a serious correction. But they also typically bottom out and form the right side of bases after such a steep decline. Such chart action is typical among emerging new leaders that could herald the next strong uptrend in stocks.
However, for now, Meta stock is also showing a weak 25 Relative Strength Rating on a three-month basis, according to MarketSurge. That's significantly below its 12-month RS Rating of 79.
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Private Equity Firms Deliver Sell Signals
Megacap techs are not the only ones that are struggling. Private equity giant Apollo Management gapped down at the open. Continued declines below the 200-day line would spell a defensive IBD sell rule.
Ares Management also plummeted, as did KKR. Both companies have been living below their 200-day lines for weeks, a negative sign. The combined market value of these three investment managers has dropped by more than $26 billion in Thursday trading alone.
10:44 a.m. ET
Stock Market Today: Banks Crushed, Some Medicals Rise
Bank stocks did worse than the major averages. The SPDR S&P Regional Banking exchange traded fund gapped lower at the open in heavy trading. The ETF lost supporting in early March, rebounded for two weeks, but failed to gain support at the key 200-day moving average in recent days ahead of Thursday's sharp selling.
Among the country's largest banks, Bank of America plunged as volume was running five times its 50-day average.
Some defensive and staple firms, however, enjoyed safe-haven status. Kroger and T-Mobile US reaped gains. All three stocks hold a Relative Strength Rating of 80 or higher from IBD.
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