President Trump surprised the markets by announcing significant reciprocal tariffs on various trading partners, in addition to a base tariff rate of 10%, causing market instability. According to Deutsche Bank's senior US economist, Brett Ryan, the tariffs were more severe than expected. Chinese imports would face a 34% tariff, while EU imports would be subject to 20% tariffs. Trump mentioned that the tariffs imposed were only half of what they could have been.

This announcement led to a sharp decline in stock prices, particularly impacting Nasdaq 100 futures, which dropped over 4.5%. Other index futures like S&P 500 and Dow were also down significantly. Major tech companies like Apple, Nvidia, Meta, Amazon, and Tesla witnessed substantial selling pressure.

Ryan's team had initially estimated an effective tariff rate of 15%-20%, but with the recent announcement, it is projected to be around 25%-30%. Strategists from Evercore ISI suggested an effective tariff rate of 29%, the highest in over a century. The current economic shock raised concerns about a possible recession, although not confirmed. Neil Dutta from Renaissance Macro described it as a significant blow to the economy.

Despite the market reaction, investors are uncertain about the duration of these tariffs and the potential responses from other countries. Wall Street experts do not foresee an immediate resolution to the tariff tensions and believe the impacts will continue to unfold over time. Stuart Kaiser from Citi advised against buying stocks on the dip given the unexpected severity of the tariff announcements.