US President Donald Trump’s reciprocal tariff announcements have triggered a massive sell-off across Wall Street. The US benchmark indices fell on Friday. The Dow, S&P 500, and Nasdaq hit their lows with Dow Jones Plunging Over 2,000 points, S&P 500 witnessing its worst two-day sell-off since March 2020 and Nasdaq has entered into bear market territory. This two-day meltdown has resulted in the loss of over $5 trillion in market value with Friday's sell-off Dow Jones is now just 700 points away from its 52 weak low. The 10-year yields slid to three basis points to 3.99% due to market fall and uncertainty in investors' minds which shifted more cash flows to bonds rather than equity markets. Whereas Donald Trump has referred to 2 April 2025 as a liberation day for the United States because Trump sees these tariffs will reform the U.S. economy.

The Dow Jones Industrial Average fell from 2,231.07 points or 5.5%, to 38,314 on Friday which is the biggest decline since June 2020 during the Covid-19 pandemic. It follows a 1,679 points decline on Thursday and records the first time ever dropped more than 1,500 points in two consecutive days. The Nasdaq Composite dropped from 5.8% to 15,587.79 and followed a 6% fall on Thursday which takes the index down by 22% from its December record. In following similar momentum S&P 500 down from 5.97% to 5,074.08, the biggest decline since March 2020, and shed more than 17% from its recent high..

 S&P 500, Nasdaq, and Dow Jones Weekly Performance

The meagcaps stocks also plunged with Nvidia 7% and Tesla fall over 10% during the session. Those companies who have large exposure to china faced hard hit, other than tech stocks Boeing and Caterpillar have large export to china seen major fall in stocks of 9% and 6% respectively.

What led to the Market Fall?

A sharp rise in trade-war intensity at the global level and China's reverse tariffs announcement on the U.S. play a significant role for market fall on Friday. The decision of China to apply a 34% tariff to all imported goods from the U.S. next Thursday, after Donald Trump tariffs come into effect, downgraded market sentiments because of deflated hopes that global settlements could reached soon. The announcement of tariffs by Donald Trump is likely to create serious trouble for the U.S. economy because the tariff rate decided by the Trump administration will definitely create a scenario of a global trade war. It adversely affects the price of goods and services in the United States for people and purchasing power, the reason behind this is a rise in import tariffs from other countries and its allies. The main trade partner of the United States is China because all the manufacturing for U.S. goods is majorly dependent on China and heavy tariffs implication on China will trouble the U.S. economy. Further Fed chair Jerome Powell's statement hit sentiment in the market as he said that the U.S. economy was more likely to face a period of higher prices and weaker growth larger than anticipated because of tariffs hikes. This uncertainty caused investors to worry about potential economic damage mainly to the global supply chain.

Trump Vision for U.S. Economy?

Donald Trump wants a transition of the U.S. economy from government dependence to a private sector-driven growth economy. Trump is ambitious in implementing permanent tax rate cuts and using tariffs as a strategic tool to strengthen the American economy. He wants more contributions from the private sector as compared to the public sector, for this Trump want to make America a manufacturing hub for all goods and disrupt the global supply chain in favor of the American economy. To facilitate this transition he is likely to reduce corporate tax to facilitate small and large scale business and entrepreneurship in America.

The main emphasis is on tariffs to implement his policy for the U.S. economy it is not just about protectionism but creating a more competitive and resilient economy at the global trade level. The main reason for tariffs implication is to seed American industries and negotiate trade discussions with other trade partners. Trump's vision is to restore the American economy from importer to exporter in global trade. The America First Trade Policy Trump aimed to reduce the trade deficit with other countries primarily with China through trade barriers and tariffs measures. Donald Trump wants trade more favorable to companies who are operating in America.

In summary, Trump wants to make America a center for manufacturing and global trade by providing cheaper land for industrialists to open new production, concession in tax rates for corporations, and favorable incentives for manufacturing and production. He wants to shift the global trade towards America and uplift the standard of living and income of American citizens. Trump is strongly against the countries that favor de-dollarization and would impose higher tariffs for those countries because he wants to establish the dollar as a dominating currency at the global level by increasing its demand.

Impact on Indian market

The massacre in US market on Friday night send negative vibes across the world special for Asian markets.  For the next week negative opening is expected with some more pin ahead for investors and traders however we believe it could be an opportunity to pick some quality stocks at lower levels. For the upcoming week 22200-22000 could act as an immediate support levels.