A sweeping tariff announcement by U.S. President Donald Trump has sent shockwaves through global financial markets, triggering a steep sell-off across major indices and raising fears of a looming global recession.The decision triggered panic across global markets, with Wall Street suffering its worst trading day in years and ripple effects felt across Europe and Asia.

U.S. markets were hit the hardest. The S&P 500 sank by 4.85%, wiping out roughly $2 trillion in market value. The tech-heavy Nasdaq plummeted by 5.99%, weighed down by sharp declines in companies such as Apple, Nvidia, and Amazon. The Dow Jones Industrial Average also dropped by 3.98%.

The new policy introduces a flat 10% tariff on all U.S. imports, with higher, targeted tariffs on countries maintaining significant trade surpluses with the U.S. President Trump defended the move as necessary to protect American industry, but economists and investors swiftly raised alarms about a potential global recession.

Technology stocks were particularly vulnerable, with Apple’s share price hit by news that its China-based manufacturing would now be subject to a 54% export tariff to the U.S. The sentiment triggered widespread selling across the tech sector.

Europe’s Stoxx 600 index declined by 2.7%, the sharpest drop in eight months. Major bourses in Germany, France, and Italy fell by over 3% as investor confidence deteriorated. With global trade facing uncertainty, investors began shifting toward safer assets such as bonds and gold.

India’s markets showed surprising resilience in contrast to the global downturn. The benchmark Nifty 50 closed down by only 0.35%, ending the day at 23,250.10. The BSE Sensex shed 0.42% to close at 76,295.36.

India’s relatively moderate fall was attributed to the country’s lower exposure to the U.S. import market compared to nations like China and Vietnam. Analysts noted that India’s smaller trade surplus with the U.S. meant its exports would be less affected by the new tariffs.

Despite the overall market stability, specific sectors in India experienced volatility. The Nifty IT index declined sharply by 4.2%, marking its worst single-day performance in two years. Concerns about a U.S. recession and reduced demand for outsourcing services were among the key drivers behind the fall in IT stocks.

In contrast, the pharmaceutical sector saw strong gains. Indian pharma firms were exempted from the new U.S. tariffs, providing a boost to major companies such as Sun Pharma, Cipla, and Lupin. Their shares rose between 3.4% and 4.2% amid optimism about continued access to the American market.

Market analysts have noted that India may be better placed than many of its Asian peers to withstand the fallout from the new U.S. trade measures. With Indian exports to the U.S. accounting for only around 2% of GDP, the overall impact on economic growth is expected to be limited to 0.3 to 0.5 percentage points.

Additionally, domestic factors such as a supportive monetary policy, improving fiscal indicators, and government stimulus measures are likely to cushion the economy from external shocks.

The U.S. stock market suffered a historic downturn on Thursday as President Donald Trump's sweeping tariffs triggered panic over a potential trade war and global economic recession. The S&P 500 plunged nearly 5%, marking its worst single-day percentage loss since June 2020, and wiping out a staggering $2.4 trillion in market value—the biggest one-day loss since the onset of the coronavirus crisis in March 2020. The Dow Jones Industrial Average also recorded its worst decline since June 2020, while the Nasdaq Composite posted its steepest percentage drop since the pandemic-driven market crash. Investors reacted with heavy selling across sectors, fearing prolonged economic instability and further disruptions in global trade.

As the global economy braces for the consequences of President Trump’s new tariff regime, markets are expected to remain volatile in the short term. Investors are watching closely for retaliatory measures from affected countries and further announcements from the White House. While the full impact is yet to unfold, early indications suggest that some economies, like India’s, may emerge relatively unscathed — at least for now.