The tariffs, poised to disrupt the global trade order, highlight a stark shift from just a few months ago when the promise of business-friendly policies under the Trump administration propelled US stocks to record highs.

“There are still a lot more questions than answers out here,” said Steven DeSanctis, small and mid-cap strategist at Jefferies Financial Group.

US stocks have lost ground since Trump took office in January, with the S&P 500 and the Nasdaq dropping 10 per cent from record highs last month, marking a correction as investors priced in the economic damage from the tariffs.

Retailers were hit hard, with Nike and Ralph Lauren falling on a raft of new tariffs on major production hubs including Vietnam, Indonesia and China.

Trump has outlined is tariff plans at an event he called ‘Liberation Day’. Source: AAP / Kent Nishimura / POOL / EPA

Big banks such as Citigroup and Bank of America , which are sensitive to economic risks, fell, as did JPMorgan Chase & Co.

Consumer staples was one of the few bright spots. The sector is traditionally considered a defensive play, but it was also buoyed on Thursday by Lamb Weston, which gained after reporting earnings.