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Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →U.S. stocks fell sharply on Friday, April 4, 2025, for a second consecutive session after President Donald Trump announced sweeping tariffs. The Dow Jones Industrial Average dropped 2,231.07 points, or 5.50%, while Reuters reported that nearly $5 trillion in S&P 500 company market value had been erased across the two sessions. That figure describes a change in market capitalization—not cash withdrawn from investors’ accounts.
How far did the major indexes fall on April 4?
The losses were broad, with the Dow, S&P 500 and Nasdaq Composite each falling nearly 6% in one session. These are the indexes’ April 4 closing figures:
| Index | Point change | Percentage change | Closing level |
|---|---|---|---|
| Dow Jones Industrial Average | −2,231.07 | −5.50% | 38,314.86 |
| S&P 500 | −322.44 | −5.97% | 5,074.08 |
| Nasdaq Composite | −962.82 | −5.82% | 15,587.79 |
The weekly declines through that Friday were larger still: the S&P 500 fell 9.1%, the Dow 7.9% and the Nasdaq 10%, according to the Associated Press. The one-day index moves and the weekly percentages measure changes in index levels, not dollar losses for a typical investor.
What did the nearly $5 trillion figure mean?
Reuters reported that about $5 trillion in market value among S&P 500 companies was wiped out over the two sessions after the tariff announcement, citing LSEG data compiled by Reuters. Reuters described the decline as a record two-day loss for the benchmark.
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Market value, or market capitalization, is the combined value investors assign to companies based on their share prices. When share prices fall, that calculated value falls too. The estimate does not mean $5 trillion in cash was taken out of the market, that every investor lost the same proportion, or that the figure covers all stock markets worldwide. It is a two-session estimate for S&P 500 companies, distinct from the indexes’ single-day point and percentage declines.
Why did stocks sell off after the tariff announcements?
Investors weighed the risk of a wider trade conflict
Trump announced sweeping U.S. tariffs on April 2. China then announced a 34% tariff on U.S. products, scheduled to begin April 10, intensifying concerns that the dispute could escalate. The announcements were the immediate backdrop to the two-day rout; they do not, on their own, establish that tariffs were the sole cause of every market move.
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Markets were concerned about prices and economic growth
Investors worried that tariffs could raise prices and businesses’ costs, with possible knock-on effects for hiring and household incomes. Reuters reported concern about a full-scale trade war and recession risk. These were risks investors were assessing at the time, not outcomes already confirmed on April 4. Reuters also reported that investors moved toward government bonds amid the stock selloff.
Federal Reserve Chair Jerome Powell said the tariffs were “larger than expected” and that the economic fallout, including higher inflation and slower growth, likely would be as well, Reuters reported on April 4. That was a contemporaneous assessment of potential effects, not a later-confirmed forecast.
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No. The Associated Press reported that a better-than-expected U.S. jobs report released that Friday did not stop stocks from falling. A favorable employment reading did not resolve investors’ concerns about tariffs, trade escalation or the possible effects on prices and growth.
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