Wells Fargo (WFC) stock plunged 6.21% in early trading on Friday, as the banking sector faced a significant selloff following President Donald Trump's announcement of sweeping global tariffs. The dramatic decline comes amid growing concerns about a potential economic slowdown and fears of a looming recession.

The banking giant's sharp drop is part of a broader trend affecting the entire financial sector. Major banks, including JPMorgan Chase, Goldman Sachs, and Bank of America, also experienced substantial declines. The KBW Nasdaq Bank Index tumbled 9.9% in the previous session, highlighting the widespread impact on the industry.

Investors are increasingly worried about the potential economic ramifications of the new tariffs. Analysts suggest that these measures could lead to reduced loan demand, increased delinquencies, and a slowdown in merger and acquisition activities, all of which could significantly hurt banks' profitability. The possibility of stagflation – high inflation combined with low economic growth – has further dampened investor sentiment in the banking sector.

While banks like Wells Fargo are generally considered to be in better financial shape than they were before the 2008 financial crisis, the current economic uncertainty is weighing heavily on investor confidence. As the market digests the implications of the new tariffs and awaits further economic indicators, Wells Fargo and its peers in the banking sector may continue to face pressure in the near term.