Here’s a Breakdown of the Damage from Thursday and Friday’s Selloff:

Indices:

S&P 500 futures (ES): -9.12%, closing at 5110.25
Nasdaq futures (NQ): -9.86%, closing at 17,539.00
Russell 2000 futures (RTY): -9.70%, closing at 1839.4

Precious Metals:

Gold miners (GDX): -8.54%, closing at 41.68
Gold futures (GC): -2.53%, closing at 3035.4
Silver futures (SI): -16.04%, closing at 29.23

Energy:

Oil equities (XOP): -18.34%, closing at 106.71
Oil futures (CL): -10.63%, closing at 61.99
Natural gas futures (NG): -5.61%, closing at 3.837

The primary trigger behind this correction was the announcement of sweeping new tariffs by Donald Trump.

On April 2, 2025, the former U.S. president announced a broad new round of import tariffs targeting both the European Union and several key Asian economies. This marks a sharp escalation in U.S. trade policy, with far-reaching consequences for inflation, consumer spending, and global macroeconomic stability.

European imports are now subject to a flat 20% tariff, affecting a wide range of goods — from industrial equipment to processed foods and everyday consumer products. Export-heavy economies like Germany, France, and Italy are especially vulnerable.

On the Asian front, China faces the heaviest penalties, with tariffs rising as high as 54% on certain electronics, industrial components, and refined raw materials. The stated aim: slow China’s growing dominance in strategic technologies.

Vietnam, now a key supplier of apparel and footwear to the U.S. market, is hit with tariffs up to 46%, while Indonesia faces duties as high as 32% on furniture, garments, and forest products.

These measures are expected to exacerbate inflationary pressures. As the cost of imported goods rises, American companies will face a tough choice: absorb the cost (cutting into margins), or pass it on to consumers. With U.S. households already under stress — confidence at historic lows and income expectations falling — this additional burden could further depress consumption.

Meanwhile, tech stocks, which have long underpinned the “wealth effect” for American households, are plunging. The Nasdaq is down over 20% year-to-date, with bellwether names like Nvidia, Meta, and Tesla falling between 30–40% from their late-2024 highs. This drawdown is undermining consumer sentiment in an economy where household spending drives 70% of GDP.

Growth forecasts are collapsing. The Atlanta Fed has slashed its Q1 GDP projection to -1.7%, even excluding temporary distortions from gold imports. Faced with rising inflation and decelerating growth, investors are rotating out of risk assets and into classic stagflation hedges — especially gold.

The troubling part? Despite its intensity, this market correction may only be in its early stages. Compared to historical drawdowns, the current pullback is still relatively shallow, both in scale and duration. In other words, there could be much more downside ahead.

Over the weekend, Tavi Costa shared a particularly compelling chart to illustrate this very point…