Concerns over tariffs cause U.S. markets to plummet; the DJIA drops more than 1,000 points.

Following U.S. President Donald Trump's announcement of extensive trade tariffs on Thursday, U.S. equities fell precipitously, raising concerns about a full-scale trade war that may cause a global recession.

The Dow Jones Industrial Average dropped 1,175 points, or 2.8%, the S&P 500 index slid 175 points, or 3.1%, and the NASDAQ Composite sank 720 points, or 4.1%, at 08:32 ET (13:32 GMT).

It is expected to be the largest one-day drop since 2022 for the broad-based S&P 500 index.

On Wednesday, President Trump unveiled sweeping new tariffs that would impose a 10% tax on all imports and far higher rates on nations considered "bad actors."

In addition to the existing 20% levies, China will be subject to an extra 34% duty. Tariffs will range from 20% to 49% for the European Union, Japan, and other countries.

The country-specific increases begin on April 9, while the general tariffs go into force on April 5.

Trump claimed that the tariffs will revitalize American industry and lower the national debt by pointing to unfair trade practices and currency manipulation as justifications.

Barclays analysts wrote that the "U.S. tariffs announcement was more hawkish than expected, particularly for Europe and China, with rates at 20% and ~54%," respectively. "High tariffs and ongoing uncertainty increase the probability of a recession, even though there may be room for discussion and many twists ahead. Stocks are probably going to go worse before improving.

Carl Weinberg, chief economist at High Frequency Economics, wrote in a note Thursday that these tariff policies could cause the U.S. gross domestic product to drop by 10% in the second quarter of 2025, which could cause the largest economy in the world to enter a recession following a forecasted slight contraction in the first quarter.