US stocks nosedive as Trump tariff bombshell slams RH, V.F. Corporation, and Five Below

U.S. equity markets were shaken on April 3, 2025, as one of the most dramatic single-day selloffs in recent memory took shape across the Nasdaq, S&P 500, and Dow Jones Industrial Average. Triggered by a sweeping global tariff mandate unveiled by U.S. President Donald Trump, the shockwaves reverberated through retail, technology, energy, and logistics sectors, as investors scrambled to reassess supply chain exposures and inflationary risks.

By the end of the trading session, the S&P 500 had fallen nearly 5%, the Nasdaq collapsed by almost 6%, and the Dow dropped over 1,700 points, erasing more than $2.5 trillion in stock market value. The losses were acutely felt among high-growth and consumer-dependent companies, with RH (formerly Restoration Hardware), V.F. Corporation, and Five Below suffering catastrophic declines of 40%, 29%, and 28% respectively.

What triggered the steep selloff in US stocks on April 3, 2025?

The immediate catalyst for the downturn was President Donald Trump’s announcement of a sweeping trade policy aimed at recalibrating the United States’ trade imbalances. The centerpiece of the policy is a minimum 10% tariff on all imports entering the U.S., with some countries, such as China, facing even steeper levies—reportedly as high as 54%. The move marks a revival of Trump-era protectionist strategies last seen during his first term, but this iteration is broader in scope and more aggressive in execution.

Financial markets reacted sharply to the announcement. Traders priced in the likelihood of retaliatory tariffs, supply chain disruptions, increased costs for import-heavy businesses, and the potential onset of stagflation—a rare and damaging combination of stagnant growth and rising inflation. The fear of inflation resurging at a time when interest rates remain elevated added to concerns that the Federal Reserve would be left with little room to maneuver.

Why did RH, V.F. Corporation, and Five Below suffer the largest losses?

RH, one of the most prominent names in luxury home furnishings, saw its stock crater by over 40%, closing at $149.39. The drop marked one of the most severe single-day losses for a consumer brand in recent years. As a company heavily reliant on high-end imports and premium finishes sourced from global suppliers, RH is particularly vulnerable to a tariff regime that inflates material and logistics costs. Even before this drop, RH had been under pressure due to shifting consumer preferences and slowing discretionary spending. Its stock is now down more than 46% from its 52-week high.

V.F. Corporation, parent to globally recognized brands like The North Face, Vans, and Timberland, fell 28.74% to $11.68. The company’s extensive dependence on apparel manufacturing hubs in Asia has made it a high-risk exposure in the context of rising import taxes. In an environment where apparel margins are already thin and consumer demand volatile, the new tariff structure could compress profitability even further.

Five Below, a discount retailer whose business model depends on sourcing low-cost goods and reselling them at under-$5 or under-$10 price points, lost 27.81% of its value, closing at $58.83. Analysts have long warned that Five Below’s ultra-low price model is highly sensitive to external shocks in supply chains. With most of its inventory originating from China and Southeast Asia, the anticipated surge in landed costs raises serious doubts about its ability to maintain pricing power.

How did other major retail and tech stocks perform under the pressure?

The rout extended well beyond these three companies. Online home goods retailer Wayfair Inc. dropped 25.59% to $25.09, amid concerns that consumer discretionary spending is weakening and tariffs would exacerbate existing margin pressures. SharkNinja Inc., a household appliance maker with global sourcing networks, fell 21.42% to $69.49.

Clothing retailer Gap Inc. saw its stock sink by 20.29% to $17.84. The company had recently started to show signs of operational stabilization, but the risk of cost inflation now threatens to reverse those gains. Similar concerns hit Canadian retailer Aritzia Inc., which declined 19.17% to $29.47.

The technology sector, especially hardware and semiconductor names, also saw steep declines. MKS Instruments fell by 20.93%, Coherent Corp. dropped 20.18%, and Lumentum Holdings lost 20.01% of its value. These companies are crucial players in manufacturing optical, semiconductor, and laser components—industries heavily tied to international suppliers and vulnerable to export/import disruptions.

Dell Technologies Inc., which fell 18.99% to $77.23, was emblematic of the tech hardware vulnerability. The company’s reliance on overseas component assembly and global distribution networks places it squarely in the crosshairs of any border tax regime. Western Digital Corporation also posted an 18.26% drop, closing at $34.15.

What broader economic concerns are weighing on investor sentiment?

The tariff announcement comes at a fragile time for the global economy. Though the Federal Reserve had paused its rate hikes following signs of moderating inflation, the imposition of across-the-board import duties is expected to fuel price increases across a broad range of goods. That raises the specter of inflationary resurgence just as wage growth shows signs of cooling and consumer savings buffers are being depleted.

The risk of stagflation—a term not used frequently since the 1970s—is back in play, according to multiple analysts. The combination of slowing global growth, rising consumer prices, and restricted monetary policy options creates a particularly toxic mix for both equity valuations and real household spending.

For the retail sector, the timing could not be worse. A recent survey of retail executives highlighted rising theft, climate-driven supply chain interruptions, and price sensitivity as leading challenges in 2025. These pressures are now compounded by sudden input cost surges, which could force mass repricing and possibly even contraction in store counts.

How are energy, fintech, and logistics sectors responding?

Energy names were not spared in the downturn. Patterson-UTI Energy Inc. fell 19.04% to $6.93, and Liberty Energy Inc. dropped 18.41% to $13.12. Crude prices have been volatile due to geopolitical tensions, but now face demand headwinds if global growth stalls as a result of retaliatory tariffs.

In the fintech space, Carvana Co. dropped 19.68% to $181.79, despite having posted a strong year-to-date rally. Investor confidence in lending-based or consumer-reliant fintech companies has weakened amid expectations of reduced credit demand. Upstart Holdings Inc. and Affirm Holdings Inc. declined by 18.77% and 18.51%, respectively, as market expectations for deteriorating consumer credit quality grew more widespread.

Logistics firms like RXO Inc. were also hit hard. The stock dropped 19.33% to $15.77 on fears that shipping delays and cross-border complexity would escalate under the new trade regime. With global freight already under stress from climate-related disruptions, the added regulatory barriers could severely dent margin expectations in the logistics sector.

What lies ahead for US equities and business outlook?

The fallout from the April 3 selloff is expected to continue reverberating across global markets in the days and weeks ahead. Analysts warn that the full effects of the tariff policy may not yet be priced in, particularly as supply chains begin to adjust and corporate earnings forecasts are revised downward.

Investor strategy is rapidly shifting from growth to defensiveness. Capital is flowing into sectors viewed as less tariff-sensitive, such as utilities, health care, and domestic services. However, even these areas are seeing increased volatility, given the overall uncertainty in trade and monetary policy.

The Federal Reserve will be under increasing pressure to clarify its stance. If inflation ticks upward due to tariffs but consumer demand falters, policymakers may face a difficult choice between fighting inflation and supporting growth.

What remains clear is that April 3, 2025, marked a turning point in investor expectations and corporate operating assumptions. With global trade entering a new phase of restriction and retaliation, the coming quarters may prove to be some of the most challenging for multinational U.S. firms in over a decade.