CNBC Daily Open: Trump tariffs decimate stocks and the red flows liberally

U.S. President Donald Trump’s so-called liberation day for the country came and went. What, exactly, did his trade plans liberate the world’s largest economy from? Leadership of the global economic and financial system? King dollar’s seat on the throne? Cordial relations with trading partners and political allies?

Of course, that’s all speculation. The tariffs, apart from the 25% duty on autos, have yet to kick in. Trump’s universal 10% tariffs will take effect April 5, while the ostensibly “reciprocal” tariff rate — calculated using an unconventional, to put it mildly, formula based on trade deficit in goods — will be live April 9.

Despite the horror expressed by economists, market strategists and (privately) CEOs, Trump might indeed be right that the U.S. economy and, more specifically, its manufacturing industry, could be revitalized after a period of pain. “The markets are going to boom. The stock is going to boom. The country is going to boom,” he said at the White House.

But for now, the only (unwilling) subjects of Trump’s “liberation” were investors, who were parted by the oppressive weight of their stock returns. After being freed on Thursday, investors fled to the safety of bonds, before more “booms” shake the market.

Trump reportedly open to tariff talks
U.S. President Donald Trump said he would be open to tariff talks with other counties if they offer something phenomenal, according to a Reuters report. Trump’s top trade aide Peter Navarro told CNBC less than an hour earlier that the sweeping tariffs are “not a negotiation.” Separately, Altimeter Capital CEO Brad Gerstner told CNBC that he spoke with CEOS of America’s largest companies, and they think tariffs are “a huge mistake.”

Bloodbath for U.S. stocks
Stocks in the U.S. plummeted Thursday. The S&P 500 sank 4.84% and the Dow Jones Industrial Average slumped 3.98%. It was both indexes’ biggest declines since June 2020. The Nasdaq Composite plunged 5.97% for its worst session since March 2020. The Russell 2000 Index of small-cap stocks declined 6.59%, bringing its losses from a 52-week high to 22.5% and putting it in a bear market. The benchmark 10-year Treasury yield fell as low as 4% as investors turned to bonds in their search for safety.

Trillions in market cap lost by Mag 7
The Magnificent Seven stocks collectively lost around $1.03 trillion in market cap, according to a CNBC analysis of Thursday’s session. As a whole, CNBC’s Magnificent Seven index tumbled more than 6% in the trading day. Apple shares were bruised the most, falling over 9%, its steepest fall in 5 years. Apple’s official list of suppliers largely comprises countries disproportionately affected by Trump tariffs.

Stagflation skulking round the corner?
Trump’s tariff plan will slow down growth and might push up prices, making the threat of stagflation “real,” Lindsay Rosner, Goldman Sachs’ head of multi-asset fixed income, said. JPMorgan economists think Trump’s trade policies “would likely push the US and global economy into recession this year.” The U.S. Federal Reserve will then face a no-win situation, having to choose between fighting inflation, boosting growth — or simply avoiding the fray and letting events take their course without intervention.

Europe stocks slammed
The pan-European Stoxx 600 tumbled 2.57% Thursday. Big retail names were among the worst performers. Adidas fell 11.7%, JD Sports was down 7.9% and Burberry gave up 8.8%. Shipping giant Maersk, widely viewed as a barometer for world trade, was 9.5% lower. Trump will “buckle under pressure” and alter his tariff policies if Europe bands together, acting German Economy Minister Robert Habeck said Thursday.

[PRO] Friday’s jobs report might be ‘a nail in the coffin’
Fresh off absorbing this week’s tariff news from the White House, investors are bracing for a jobs report Friday that might provide little in the way of good news, even if it is better than expected. And if job numbers come in weak, it might be “a nail in the coffin for the U.S. economy,” wrote one market strategist.

The biggest winners and losers in Europe as Trump announces sweeping tariffs

The European Union has been slammed with 20% duties, while the U.K. was hit with a lower 10%, benefiting from its more balanced U.S. trade relationship.

Most analysts agree that, from an economic perspective, there are few — or perhaps no — economic winners from the expected slowdown in growth and the fracturing of trade ties.

Some bright spots nevertheless emerged among European assets on Thursday — as well as some deeply negative ones. CNBC takes a look at the prospects of sectors ranging from luxury goods, to food and drink, to retail.