US Stock Funds Take a Hit—Everywhere

Markets move fast. But rarely do they fall this hard, so quickly. Since Donald Trump’s April 2, 2025, announcement of sweeping tariffs on nearly all major US trading partners, equity funds have suffered a punishing blow. In the five days that followed, every major US equity Morningstar Category—from small value to large growth—plunged by 10% to 12%. In the first few hours of trading on April 8, the US market showed some signs of life. But the rally stalled, and US markets ended the day even lower.

Morningstar Categories

Ranked by best year-to-date total returns. Total Returns through 7 April 2025.

Morningstar Categories

Ranked by worst year-to-date total returns. Total Returns through 7 April 2025.

Wreckage Across the Board

There have been few places for US-centric funds to hide. The so-called Magnificent Seven—the tech giants that propped up markets through much of 2023 and 2024—have fallen from grace. Large-growth funds, most of which hold those heavyweights, were down 17% so far this year through April 7—a bit better than large-growth indexes’ 18% decline. Many small-cap growth funds slid even further.

Regional Market Performance Ranked by Best Year-to-Date Total Returns

Regional Market Performance Ranked by Worst Year-to-Date Total Returns

The picture that has emerged is one of investors shifting rapidly out of risk. Categories heavy in richly valued or economically sensitive companies have been hit the hardest. Technology, consumer cyclicals, and small caps—all areas that rely on optimism and global integration—have suffered. Defensive sectors have fared better. Utilities, consumer defensives, and dividend strategies have seen far smaller drawdowns. Meanwhile, assets traditionally viewed as safe havens are holding steady or gaining. Gold funds have risen as equities have slumped.

The Pattern Behind the Panic

The selloff didn’t begin with this month’s tariff tantrum, but it exploded in its wake. Trade tensions had already begun to haunt the markets. Fears of a slowdown were simmering. Growth stocks have suffered all year. Small-cap shares have been slipping since November. But until April 2025, some corners of the market—such as large value—had remained mostly steady. That resilience now seems gone. The tariff shock turned an uneasy slide into a synchronized stampede for the exits.