US Futures Decline, $2 Trillion Wiped Out as Tariff Shock Affects Stocks and Bitcoin

On Wednesday, U.S. equity futures and major cryptocurrencies experienced a significant drop following President Donald Trump’s announcement of extensive new tariffs affecting 185 countries. This move unsettled global markets and sparked a widespread risk-off sentiment.

According to The Kobeissi Letter, the situation was described as “truly insane to watch,” as markets reacted violently during Trump’s presentation of tariff rates for each nation during his “Make America Wealthy Again” event.

The S&P 500 saw a decline of more than $2 trillion in market capitalization within just 15 minutes, while Nasdaq 100 futures fluctuated nearly 900 points from their peak to trough before concluding near session lows.

As of 8:45 PM ET, Dow Jones futures had dipped by 1.26%, S&P 500 futures were down 1.16%, and Nasdaq 100 futures were down 1.20%.

The White House announced a baseline 10% tariff on all imports, with markedly higher rates for specific countries. For instance, China will face a 34% tariff, while the European Union is subject to a 20% tariff. 

Trump labeled these measures as “reciprocal tariffs,” asserting that U.S. tariffs would be half the rates imposed by other nations on American products.

The cryptocurrency markets have been moving in tandem with equities, a trend observed over recent financial quarters. 

Bitcoin dropped 2.3% to approximately $83,200, while Ethereum fell 4.5% to $1,817, according to CoinGecko data. 

“There’s little reason to hold risk assets right now,” stated Joe McCann, founder and CEO of Asymmetric, in an interview with Decrypt. “Currently, crypto is being influenced by macroeconomic trends and traditional markets. Without a clear catalyst, crypto will behave like any other risk asset.”

McCann also pointed out growing inflation expectations, with one-year inflation swaps rising above 3.3%, cautioning that the tariff shock could push Q2 GDP into negative territory.

In Washington, a resolution spearheaded by Senator Tim Kaine (D-Va) to rescind Trump’s emergency tariff authorities over Canada is gaining bipartisan traction. 

At least four Republican senators, including Rand Paul and Mitch McConnell, have expressed their intention to support the measure. However, it is unlikely to pass in the GOP-controlled House or survive a presidential veto.

The magnitude and unpredictability of the tariff announcement have redirected investor attention to macroeconomic challenges, while markets reassess inflation expectations, growth risks, and policy responses as they approach Q2.