Global markets on Thursday were severely rattled by President Donald Trump’s historic tariff announcement, which threatens to throw the US and the rest of the world into a recession.

The Dow plunged 1,570 points, or 3.7%, in morning trading. The broader S&P 500 was down by 4.36%, hitting its lowest level since September. The tech-heavy Nasdaq plunged 5.6%. The Dow and S&P 500 were on pace for their worst day since the 2022 inflation crisis. The Nasdaq was on pace for its worst day since March 2020.

Global markets also fell sharply Thursday. Europe’s benchmark STOXX 600 index tumbled 2.34% and Germany’s DAX index fell 2.29%. In Asia, Japan’s Nikkei 225 index sank 2.77% and Hong Kong’s benchmark Hang Seng index fell 1.52%.

The significant declines come after Trump’s massive tariffs imposed on practically all goods coming into the United States sparked fears that the new policy could trigger significant backlash from trading partners and take down the global economy.

That’s part of the reason the US dollar fell to its weakest level since October on Thursday. Tariffs in theory should boost the dollar, but investors’ concerns that the United States is creating a self-inflicted wound that would stymie its long-term growth sent the dollar sinking against other global currencies.

Similarly, investors poured money into safe-haven assets. Gold surged to a new record Wednesday above $3,160 a troy ounce, and Treasury bond yields fell sharply. The yield on the 10-year Treasury note fell to its lowest level since October. Bonds and prices trade in opposite directions. Gold, which hovered above $3,100 a troy ounce Thursday morning, is up 19% this year and just posted its best quarter since 1986.

Stocks leading US markets lower included companies that rely on international supply chains that will be subject tariffs. Apple (AAPL) sank 8.7%. Nike (NKE) tumbled 12.7%. Best Buy (BBY) plunged 15.3% and Ralph Lauren (RL) tanked 17.4%.

Apple shed almost $300 billion in market value from market close on Wednesday to morning trading on Thursday, according to FactSet data.

Recession fears

If Trump maintains the massive tariffs he announced Wednesday, his unprecedented trade policies will probably cause the US and global economies to both fall into a recession in 2025, JPMorgan analysts said in a note to investors.

That’s not exactly a shock: Prior to Trump’s announcement Wednesday, JPMorgan analysts gave the US economy a 40% shot of entering a recession.

JPMorgan noted that the tariffs would hike taxes on Americans by $660 billion a year — the largest tax increase in recent memory by a longshot. It will cause prices to surge, too, adding 2% to the Consumer Price Index, a measure of US inflation that has struggled to come back down to earth in recent years.

“The impact on inflation will be substantial,” the analysts said. “We view the full implementation of these policies as a substantial macro economic shock.”

The shock will be exacerbated by plunging consumer and business sentiment and by any retaliation visited upon America as foreign countries potentially impose new tariffs on the United States.

“We thus emphasize that these policies, if sustained, would likely push the US and global economy into recession this year,” the analysts said.

Oil prices plunged on Thursday on worries that Trump’s trade war will slow the world economy and that OPEC is oversupplying the market. US oil futures plummeted 7.59% to $66.27 a barrel, leaving crude on track for its worst day since July 2022. Brent crude, the world benchmark, tumbled 6.95%.

OPEC+ surprised investors on Thursday by announcing that Saudi Arabia, Russia and six other members have agreed to sharply accelerate previously scheduled production increases starting in May.

Businesses brace for impact

The Business Roundtable, a powerful group of America’s leading CEOs, warned Wednesday night that Trump’s latest tariffs could backfire on their businesses.

“Universal tariffs ranging from 10-50% run the risk of causing major harm to American manufacturers, workers, families and exporters,” Business Roundtable CEO Joshua Bolten said in a statement. “Damage to the US economy will increase the longer the tariffs are in place and may be exacerbated by retaliatory measures.”

Trump’s massive new tariffs would send the US tariffs rate dramatically higher to levels unseen since around 1910, according to Fitch Ratings.

Trump’s aggressive tariff moves are set to lift the US tariffs rate from just 2.5% last year to 22%, according to Fitch.

That surpasses the roughly 20% tariff rate the United States charged following the infamous Smoot-Hawley Tariff Act of 1930, which set off a global trade war that economists say worsened the Great Depression.

“This is a game changer, not only for the US economy but for the global economy,” Olu Sonola, head of US economic research at Fitch Ratings, wrote in a statement on Wednesday.

Sonola said “many” nations will likely plunge into recession.

“You can throw most forecasts out the door, if this tariff rate stays on for an extended period of time,” the Fitch economist said.