Updates with early afternoon prices

By Sruthi Shankar and Pranav Kashyap

April 3 (Reuters) - Heavyweight technology stocks led a broad selloff on Wall Street on Thursday after President Donald Trump's sweeping tariffs on major trade partners ignited fears of an all-out trade war and raised the risk of a global economic recession.

Investors fled from risky assets, seeking the safety of government bonds after Trump slapped a 10% tariff on most goods imported into the United States and much higher levies on dozens of other countries.

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

High-flying technology stocks, that have pushed Wall Street to record highs in recent years, suffered big declines on Thursday.

Apple AAPL.O sank 8.4%, reeling from the impact of an aggregate 54% tariff on China, which is the base for much of the iPhone maker's manufacturing. Nvidia NVDA.O slumped 6.2% and Amazon.com AMZN.O dropped 7.4%.

"The tariff announcement was much more dire than expected and as a result stocks are in a free fall, which is due to the expected inflationary impact of these tariffs," said Sam Stovall, chief investment strategist at CFRA Research.

"If the Trump administration is not really willing to negotiate upfront, then we will be hit with retaliatory tariffs, and that could end up exacerbating the situation and make matters worse."

China vowed retaliation, as did the European Union, which faces a 20% duty. South Korea, Mexico, India and several other trading partners said they would hold off for now as they seek concessions before the targeted tariffs take effect on April 9.

At 11:32 a.m. the Dow Jones Industrial Average .DJI fell 1,427.21 points, or 3.38%, to 40,798.11, the S&P 500 .SPX lost 227.51 points, or 4.00%, to 5,444.20, and the Nasdaq Composite .IXIC lost 899.29 points, or 5.11%, to 16,701.76.

The CBOE Volatility index .VIX, known as Wall Street's fear gauge, touched a three-week high at 26.91 points.

U.S. stocks have lost ground since Trump took office in January, with the S&P 500 and the Nasdaq .IXIC dropping 10% from their record highs last month, marking a correction, as investors priced in the damage from tariffs on the economy and businesses.

After Trump's announcements, traders are ramping up expectations for the U.S. Federal Reserve to cut interest rates four times this year, starting with a quarter-point cut in June.

That heightens the significance of Friday's payrolls data and Fed Chair Jerome Powell's speech, which could offer crucial insights into the health of the U.S. economy and the future path of interest rates.

Retailers were hit hard on Thursday, with Nike NKE.N dropping 10.2% and Ralph Lauren RL.N falling 16% after Trump imposed a raft of new tariffs on major production hubs including Vietnam, Indonesia and China.

Big banks such as Citigroup C.N and Bank of America BAC.N, which are sensitive to economic risks, fell about 10% each. JPMorgan Chase & Co JPM.N lost 6.3%.

The U.S. small-cap Russell 2000 index .RUT tumbled 5.9%, underscoring concerns about the health of the domestic economy.

Oil stocks including Exxon Mobil XOM.N and Chevron CVX.N fell about 5% each as crude prices LCOc1, CLc1 slumped 7% on Trump tariffs and OPEC+ speeding up output hikes.

Declining issues outnumbered advancers for a 5.16-to-1 ratio on the NYSE and a 6.04-to-1 ratio on the Nasdaq.

The S&P 500 posted 33 new 52-week highs and 80 new lows, while the Nasdaq Composite recorded 21 new highs and 545 new lows.

(Reporting by Sruthi Shankar and Pranav Kashyap in Bengaluru; Additional reporting by Nupur Anand; Editing by Saumyadeb Chakrabarty, Anil D'Silva and Shounak Dasgupta)

((sruthi.shankar@thomsonreuters.com))