Wall Street saw its worst wipeout since 2020 on Thursday, a day after President Donald Trump announced sweeping tariffs, in a slide that cost the Northwest’s largest private employers billions in market value.
Share prices for two of the most valuable companies in the world, Seattle-based Amazon and Redmond-based Microsoft, fell Thursday. Amazon fell 9% while Microsoft dipped 2%.
Most of the Seattle area’s other publicly traded companies fared no better. Expedia tumbled 9% on Thursday, and Zillow slipped 4%. Meta, Google and Salesforce aren’t based in the Puget Sound region but all three have sizable engineering hubs in the area; they all fell 9%, 4% and 6%, respectively.
T-Mobile saw a 1% gain, erasing a Wednesday loss.
All of Wall Street was affected. The S&P 500 sank 4.8%, more than in major markets across Asia and Europe, according to The Associated Press. It was the S&P 500’s worst day since the COVID-19 pandemic crashed the economy in 2020.
Even still, some market watchers warned of more trouble ahead.
“Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” said Sean Sun, portfolio manager at Thornburg Investment Management, to the AP.
The reason for Amazon’s fall is fairly intuitive. China-based sellers account for significant portions of the company’s third-party seller and advertising revenue. Any trade restrictions that affect the country could affect operating results, Amazon said last year in a regulatory filing.
Microsoft and Google operate globally, but those companies aren’t importing and exporting goods to drive their main sources of revenue.
“At this point we don’t fully know how the tariffs are going to play out,” said Philip Bond, a finance professor at the University of Washington. “They seem to be focused on goods rather than services.”
Trump placed a 32% tariff on Taiwan but exempted computer chips, an import the tech sector relies heavily on.
“Everything feels so volatile, it’s not impossible if that changes,” Bond said. “If it did, that would be a big hit to tech. If those costs go up, that would lead to a further reaction.”
Other industries and indexes weren’t spared either. The Dow Jones Industrial Average dropped 4% and the Nasdaq composite fell 6%.
Altogether, the tariffs could reduce U.S. economic growth by 2 percentage points this year and raise inflation close to 5%, the AP reported, citing investment bank UBS.
Retail companies in the Puget Sound region were hammered on Wall Street. Nike and Columbia Sportswear, both based in the Portland area, fell 14% and 13%, respectively, Thursday. With harsher tariffs on Asian countries, apparel companies are particularly vulnerable due to their reliance on suppliers in Vietnam, China and Indonesia.
Large retailers like Nike can withstand a dip in stock price, but the reason for uncertainty from Wall Street could hit smaller retailers harder: increased costs.
“You could see one retailer that’s not in great shape to begin with having to do layoffs or close weaker stores,” said David Swartz, a senior equity analyst for Morningstar. “I don’t see a nationwide brand going under simply because of tariffs, but we could see struggling ones go out.”Two other Seattle-based companies that rely on imported goods, Starbucks and Boeing, fell 11% and 10%, respectively.
“What we’re seeing is companies particularly tied to the global economy being more affected,” said Amy Barnes, the Redmond-based CEO of Firebrand Wealth Management. “There may also be the expectation of a slowdown for consumer spending, affecting companies like Amazon that sell goods and services.”
Because coffee beans don’t grow in the contiguous U.S., Starbucks sources the main ingredient for its primary product from what it calls the “coffee belt.” Starbucks’ coffee beans grow in Costa Rica, Guatemala, Ethiopia, Indonesia and numerous other countries across multiple continents.
The countries Starbucks sources from have varying tariff rates, one of the oddities of the announcement, Bond said.
“There’s a lot of weird variation and Starbucks may have more ability to shift coffee producers than you might think,” he said.
During a shareholders meeting last month, Starbucks CEO Brian Niccol was asked about then-impending tariff plans and how they would affect the company. He said the “good news is the company at our scale has a great history of navigating these various changes.
“I think we have purchasing practices that help reduce the price volatility, that ensure we have a healthy green coffee supply,” Niccol said.
Niccol said last year the company was not going to increase prices for the 2025 fiscal year.
Wall Street had long assumed Trump would use tariffs only to force concessions from trading partners. But on Wednesday Trump described the new tariff regime as part of an ideological goal and spoke of returning manufacturing jobs to the U.S., a process that could take years.
In the meantime, retirement funds and investment portfolios took a hit on Thursday. Despite that, Firebrand’s Barnes advises against doing anything rash one day into a market dip.
“It’s hard to get back into the market when you’ve sold everything,” she said.
During the COVID crash, some of Barnes’ clients jettisoned their portfolios making it harder to buy back in during the rebound.
“I’m not saying there aren’t going to be pain points, but I’m urging people to be careful,” Barnes said.
While retirees are consulting with professionals about their portfolio, Barnes urges careful spending and for people to be mindful of their savings.
“Hold on tight,” she said. “It’s going to be a very bumpy year.”
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