Investing.com-- U.S. stock index futures plummeted on Wednesday evening after U.S. President Donald Trump announced at least 10% tariffs on all imported goods, with much higher reciprocal duties for some countries.

S&P 500 Futures slumped 3.6% to 5,505.25 points, while Nasdaq 100 Futures plunged 4.5% to 18,875.50 points by 20:02 ET (00:02 GMT). Dow Jones Futures fell 2.5% to 41,443.0 points.

Trump announces harsher-than-expected tariffs

President Trump announced sweeping new tariffs on Wednesday, imposing a 10% levy on all imports and significantly higher rates on countries deemed "bad actors."

China faces an additional 34% tariff on top of the 20% duties already in place. The European Union, Japan, and others will see tariffs ranging from 20% to 49%.

The broad tariffs take effect on April 5, with the country-specific hikes starting April 9.

Canada and Mexico were notably exempted from this baseline rate due to existing agreements but were still subject to 25% tariffs on most goods.

Additionally, a 25% tariff on foreign-made automobiles and key auto parts was set to take effect on April 3, 2025.

Trump justified the tariffs by citing unfair trade practices and currency manipulation, asserting that these measures would rejuvenate American industries and reduce the national debt.

However, financial markets reacted negatively, with U.S. stock futures slumping amid concerns about inflation and potential retaliation from key trading partners.

“President Trump has announced a swathe of tariffs that he hopes will fund income tax cuts and incentivise manufacturing reshoring. In the long run it may deliver positives for the US economy, but the measures taken mean a painful transition period ahead,” ING analysts said in a note.

US stocks close higher, Tesla quarterly deliveries slip

Major stock indices closed higher on Wednesday before Trump’s tariff announcement.

In regular trading on Wednesday, the S&P 500 gained 0.7%, while the NASDAQ Composite rose 0.9%. The Dow Jones Industrial Average closed up 0.6%

Tesla Inc (NASDAQ: TSLA ) shares closed 5.3% higher on Tuesday after reports emerged that CEO Elon Musk might step down from his government role to focus on the company.

Musk later dismissed the claim as “fake news.”

The EV maker released its first quarter delivery report on Wednesday, sowing 336,681 vehicle deliveries in the period, below the average forecast of 390,000 deliveries.

Shares of the company slipped 7.7% in extended trading, in line with the broader market amid tariff worries.