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NASDAQ investors feel the pain and pleasure more keenly than those who are broadly diversified |
Trump’s Tariffs Wipe Out Over $6 Trillion on Wall Street in Epic Two-Day Rout
The message from Wall Street’s epic two-day rout, which destroyed $6.6 trillion in market value: There is nowhere to hide from Trump’s steep tariffs on goods imported from nearly every corner of the planet.My portfolio was heavily weighted toward tech stocks during the 2000 dot-com bust and the 2008 financial crisis. Those were nervous times. I didn't understand those crises--and certainly had no confidence in their remedies--but eventually stocks recovered and moved to greater heights.
Manufacturers and retailers. Exporters and importers. High tech and low tech. Big names in virtually every industry were hit, from Silicon Valley behemoths like Apple and Meta Platforms to aerospace manufacturer Boeing to oil producer Devon Energy. Shares of private-equity giant Apollo Global Management lost about a fifth of their value this week, as did United Airlines.
When it was all over, the Dow Jones Industrial Average had lost more than 3,000 points for the week, or 7.9%, sending the blue-chip index into a correction. The tech-focused Nasdaq plunged 10% and into a bear market, meaning the index had fallen 20% from its previous high. The S&P 500 sank 9.1%.
The Magnificent Seven group of large tech stocks lost about $1.6 trillion in market value, according to Dow Jones Market Data.
“There are a lot of confused, scared and angry people out there,” said Steve Sosnick, chief strategist at Interactive Brokers.
This time we do understand why markets fell, and it's a reasonable supposition that reversing the tariffs could lead to at least a partial recovery. On the bright side, there's always the chance that they could work in getting other countries to lower their trade barriers during bilateral negotiations. No, the sky isn't falling, at least not yet.