# How Do Tariffs Affect the Stock Market? > What the 2018 trade war and the 2025 tariff selloff did to US stocks, which sectors and stocks fell most, what held up, and how fast prices recovered. Source: https://www.exent.ai/resources/tariffs-and-stocks · Reviewed by David, Senior Analyst, Exent · Published Nov 11, 2026 · Updated Nov 11, 2026 ## Key takeaways - In both recent tariff shocks, US stocks fell close to 20% and then recovered: SPY fell 20.2% in the 2018 trade-war selloff and 19.0% in the 2025 tariff selloff (Exent’s data, as of Sep 30, 2026). - Tariff news moves prices fast in both directions. The S&P 500 lost about $5 trillion over April 3–4, 2025, then rose 9.5% on April 9 when most new tariffs were paused. - The damage was uneven. Energy and technology stocks were among the hardest hit in both episodes; utilities and consumer staples held up best. - Neither year ended at the lows: SPY returned −4.6% in 2018 and +17.7% in 2025. ## How do tariffs affect stocks? Tariffs hit stocks through costs, retaliation, inflation and uncertainty. A tariff is a tax on imports, paid by the importer. Companies that rely on imported parts or goods face higher costs; they either absorb them, which cuts margins, or pass them on, which can cut sales. - **Retaliation** hits exporters: other countries answer with tariffs of their own. - **Inflation and rates:** higher import prices can keep inflation up, which can keep interest rates higher for longer. - **Uncertainty:** when nobody knows the final rates, companies delay investment and investors pay less for future profits. The market’s first reaction is usually to the surprise and the uncertainty, not to a careful estimate of the economic cost. That is why tariff headlines can move prices sharply in both directions within days. ## What happened to stocks in the 2018 trade war? Stocks fell about 20% in late 2018, then recovered in 2019. The [US Trade Representative](https://www.ustr.gov/about-us/policy-offices/press-office/press-releases/2018/june/ustr-issues-tariffs-chinese-products) put a 25% tariff on about $34 billion of Chinese imports from July 6, 2018, and China answered with tariffs on the same amount of US goods. Further rounds followed, including a [$200 billion list](https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions) later that year. In Exent’s data, SPY’s peak-to-trough decline in the 2018 selloff was 20.2%. Tariffs were not the only cause: interest rates were also rising. Chip and energy stocks fell hardest. Among the largest US stocks, NVIDIA fell 56.0% and AMD 48.9%, while utilities such as Duke Energy (−7.7%) and NextEra Energy (−8.2%) barely moved. SPY still finished 2018 down only 4.6% and returned +31.2% in 2019. ## What happened to stocks in the 2025 tariff selloff? The 2025 selloff was faster and recovered faster. After the broad tariffs announced on April 2, 2025, the S&P 500 lost about $5 trillion in market value over April 3–4, a record two-day decline according to [Reuters, citing LSEG data](https://boereport.com/2025/04/04/sp-500-loses-5-trillion-in-two-days-in-trump-tariff-selloff/). On April 9 the administration paused most of the new tariffs for 90 days, and the S&P 500 rose 9.5% in a day, its largest one-day gain outside 2008 according to [Russell Investments](https://russellinvestments.com/content/ri/us/en/insights/russell-research/2025/04/tariff-pause-one-day-relief.html). By June 27, the index closed at its first record since February, as [Bloomberg reported](https://news.bloombergtax.com/capital-markets/stocks-hit-record-as-fed-cut-bets-gain-momentum-markets-wrap). In the same data, SPY fell 19.0% from peak to trough, and returned +17.7% for 2025 as a whole. Our 2025 tariff selloff page has the full timeline. ## Which sectors are hurt most by tariffs? In both episodes, energy and technology were among the hardest hit, and utilities and consumer staples among the least. The table shows the median peak-to-trough decline of the largest US stocks in each sector, from Exent’s crash study (428 stocks in 2018, 475 in 2025). | Sector (median large stock) | 2018 trade-war selloff | 2025 tariff selloff | | --- | --- | --- | | Energy | −34.1% | −23.1% | | Industrials | −25.9% | −19.4% | | Technology | −24.8% | −28.1% | | Financial services | −24.2% | −24.1% | | Basic materials | −23.5% | −19.0% | | Consumer cyclical | −22.2% | −18.5% | | Healthcare | −20.8% | −15.9% | | Communication services | −19.6% | −20.5% | | Consumer defensive | −18.2% | −10.3% | | Real estate | −12.3% | −17.7% | | Utilities | −9.8% | −8.7% | | SPY (S&P 500) | −20.2% | −19.0% | Source: the same crash study, data as of Sep 30, 2026. Companies with global supply chains and large foreign sales, chipmakers above all, carried the most tariff risk. Businesses selling everyday goods at home carried the least. ## How did the Magnificent 7 and other assets do? Most of the Magnificent 7 fell more than the S&P 500 in both selloffs. Treasuries and gold barely moved. Largest declines within each episode, from the same data: | Holding | 2018 trade-war selloff | 2025 tariff selloff | | --- | --- | --- | | NVIDIA (NVDA) | −56.0% | −32.7% | | Apple (AAPL) | −36.7% | −30.2% | | Amazon (AMZN) | −33.2% | −24.7% | | Meta (META) | −26.5% | −28.3% | | Tesla (TSLA) | −21.6% | −38.5% | | Alphabet (GOOGL) | −18.7% | −21.9% | | Microsoft (MSFT) | −18.6% | −14.8% | | QQQ (Nasdaq-100) | −22.9% | −22.9% | | IWM (Russell 2000) | −26.5% | −22.8% | | TLT (20+ year Treasuries) | −4.8% | −4.9% | | GLD (gold) | −2.7% | −5.0% | Apple fell more than 30% both times; NVIDIA fell most in 2018 and Tesla in 2025. Stock pages: [NVDA](https://www.exent.ai/stocks/nvda), [AAPL](https://www.exent.ai/stocks/aapl). For how concentrated the index has become in these names, see [the Magnificent 7 vs the other 493](https://www.exent.ai/resources/magnificent-7-vs-the-other-493). ## What can investors learn from 2018 and 2025? The main lesson is that tariff selloffs were sharp but, in these two cases, not lasting; the risk sat in specific holdings. A few practical points follow: - Know which of your holdings depend on imports, foreign sales or China: those drove the losses both times. - Expect policy to reverse quickly; the April 9, 2025 rally came less than a week after the worst two days. - Check whether your diversifiers held up: Treasuries and gold did in both episodes, unlike in 2022. - Avoid acting on a single headline; both selloffs recovered within months. - Size positions so a 20% market drop, and a bigger drop in your largest holdings, is something you can sit through. To see what a repeat would cost your own holdings, try the [crash test](https://www.exent.ai/tools/crash-test), or read how to separate [market noise from signal](https://www.exent.ai/resources/market-noise-vs-signal). ## How to track tariff risk with Exent 1. Market Intelligence gives a daily read of the market with cited sources and an events calendar, so tariff deadlines and data releases are in one place. 2. Cross‑asset signals and the Mag 7 vs the other 493 view show whether a selloff is broad or concentrated in a few names. 3. Portfolio Analysis replays your own holdings through the 2018 and 2025 selloffs, alongside 2008, 2020 and 2022, in dollars. Exent is our product: [Exent Market intel](https://www.exent.ai/intel) ## Frequently asked questions ### Do tariffs cause stock market crashes? Tariff shocks caused sharp selloffs in 2018 and 2025, with SPY falling about 20% and 19% from peak to trough in Exent’s data. In both cases stocks recovered within months, but past recoveries do not guarantee future ones. ### Which stocks are hurt most by tariffs? Historically, companies with global supply chains and large foreign sales, such as chipmakers, and cyclical sectors like energy and industrials. Utilities and consumer staples fell least in both 2018 and 2025. ### How long did stocks take to recover from the 2025 tariff selloff? The S&P 500 bottomed in early April 2025 and closed at a new record on June 27, 2025, less than three months later. ### Are tariffs inflationary? Tariffs raise the price of imported goods, and companies often pass part of that on to customers. How much it adds to overall inflation depends on the size of the tariffs and how long they last. ### Do tariffs help any stocks? Domestic producers that compete with imports can gain pricing power. In the 2018 and 2025 selloffs, though, the stocks that held up best were mostly defensive businesses like utilities and consumer staples. --- Educational content, not investment advice. Past performance does not guarantee future results.