Wall Street saw a bloodbath in the April 3 trading session, triggered by President Donald Trump’s sweeping trade tariffs, which stoked fears of an all-out trade war and a global economic recession. The major U.S. indices logged their biggest one-day slide in five years. 

The tech-heavy Nasdaq Composite Index led the sell-off, plummeting 6% and marking the biggest daily fall since March 2020. The S&P 500 and the Dow Jones Industrial Average posted their largest daily percentage declines since June 2020, tumbling nearly 5% and 4%, respectively. Notably, the S&P 500 companies erased a combined $2.4 trillion in market value, pushing the index again into correction territory (read: Trump Tariff Shakes U.S. Market: 5 Inverse ETFs to Gain). 

Despite the broad indices’ losses, a few ETFs survived the market rout in yesterday's trading session. These include Global X Renewable Energy Producers ETF RNRG, iShares U.S. Healthcare Providers ETF IHF, iShares U.S. Consumer Goods ETF IYK, First Trust Nasdaq Food & Beverage ETF FTXG and SPDR Dow Jones International Real Estate ETF RWX. The ETFs have managed to remain in green, having gained at least 1% in yesterday's trading.

Trade War Fear Worsens

Trump unveiled a sweeping 10% baseline tariff on all U.S. imports, effective April 5, alongside significantly higher duties on key trading partners. The new tariffs include a 34% rate on China, 20% on the European Union, 46% on Vietnam, 32% on Taiwan and 26% on India, all set to take effect on April 9. In total, approximately 185 countries will be impacted, pushing U.S. tariff rates to their highest level in over a century. 

According to a JPMorgan economist, the tariffs represent the largest tax hike since 1968 and could push inflation up by 1.5% this year, based on the Federal Reserve’s preferred measure (read: New Tariff Worsens Trade War Fears: 5 Safe Haven ETFs to Buy).

China has urged the United States to withdraw its latest tariffs and vowed countermeasures to protect its economic interests. Meanwhile, the European Union is preparing retaliatory measures should negotiations fail.

The new administration also confirmed that the 25% tariff on global car and truck imports will proceed as planned on April 3, with additional duties on automotive parts set to take effect on May 3. The escalating trade tensions increase the risk of a full-scale trade war, which could slow down global economic growth. 

Magnificent Seven Take a Beating

Companies whose supply chains are heavily reliant on overseas manufacturing have suffered the most. Magnificent Seven stocks collectively lost more than $1 trillion in market cap amid the rout. Apple (AAPL) had its worst day since March 2020, plummeting more than 9%, while Amazon logged its biggest one-day decline since 2022, plunging around 9%. AI darling NVIDIA (NVDA) sank more than 7%. Alphabet (GOOGL) and Microsoft (MSFT) lost 4% and 3%, respectively.

Retail and Industrial Stocks Hit Hard

Nike (NKE) and Lululemon Athletica (LULU), both dependent on manufacturing in Vietnam, dropped more than 12%. Meanwhile, Target Corp. (TGT) and Dollar Tree (DLTR), reliant on imported goods, slumped more than 10%. Shares of companies like Walmart (WMT), Five Below (FIVE), and Gap (GAP) that import a bulk of their goods from Asia also declined.

ETFs That Weather Storm

Global X Renewable Energy Producers ETF (RNRG) 

With AUM of $24 million, Global X Renewable Energy Producers ETF seeks to invest in companies that produce energy from renewable sources, including wind, solar, hydroelectric, geothermal and biofuels. It tracks the Indxx Renewable Energy Producers Index, holding 37 stocks in its basket and charges 65 bps in annual fees. RNRG currently has a Zacks ETF Rank #4 (Sell).

iShares U.S. Healthcare Providers ETF (IHF)

iShares U.S. Healthcare Providers ETF follows the Dow Jones U.S. Select Healthcare Providers Index with exposure to 67 companies that provide health insurance, diagnostics and specialized treatment. It has amassed $669.9 million in its asset base and charges 40 bps in annual fees. IHF has a Zacks ETF Rank #3 (Hold).

iShares U.S. Consumer Goods ETF (IYK)

iShares U.S. Consumer Goods ETF offers exposure to U.S. companies that produce a wide range of consumer goods, including food, automobiles, and household goods, by tracking the Russell 1000 Consumer Staples RIC 22.5/45 Capped Index. It holds about 56 stocks in its basket. iShares U.S. Consumer Goods ETF has amassed $1.5 billion in its asset base and charges 40 bps in annual fees. It carries a Zacks ETF Rank #3 (read: Recession Fears Looming? Secure Your Portfolio With These ETFs).

First Trust Nasdaq Food & Beverage ETF (FTXG)

First Trust Nasdaq Food & Beverage ETF offers exposure to U.S. companies within the food and beverage industry. It tracks the Nasdaq US Smart Food & Beverage Index, holding 30 securities in its basket. First Trust Nasdaq Food & Beverage ETF has AUM of $26.1 million and charges 60 bps in annual fees. It has a Zacks ETF Rank #4.

SPDR Dow Jones International Real Estate ETF (RWX)

SPDR Dow Jones International Real Estate ETF offers exposure to global real estate securities that represent the ownership and operation of commercial or residential real estate. It follows the Dow Jones Global ex-U.S. Select Real Estate Securities Index and holds 122 stocks in its basket. RWX charges 59 bps in annual fees and has gathered $252.3 million in its asset base.

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iShares U.S. Healthcare Providers ETF (IHF): ETF Research Reports

iShares U.S. Consumer Staples ETF (IYK): ETF Research Reports

SPDR Dow Jones International Real Estate ETF (RWX): ETF Research Reports

First Trust NASDAQ Food & Beverage ETF (FTXG): ETF Research Reports

Global X Renewable Energy Producers ETF (RNRG): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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