NEW YORK — Financial markets around the world are reeling Thursday following President Donald Trump’s latest and most severe volley of tariffs, and the U.S. stock market may be taking the worst of it.

The S&P 500 was down 3.3% in early trading, worse than the drops for other major stock markets. The Dow Jones Industrial Average was down 1,204 points, or 2.9%, as of 9:50 a.m. Eastern time, and the Nasdaq composite was 4.3% lower.

Little was spared as fear flared globally about the potentially toxic mix of higher inflation and weakening economic growth that tariffs can create. Prices fell for everything from crude oil to Big Tech stocks to small companies that invest only in U.S. real estate. Even gold, which has hit records recently as investors sought something safer to own, pulled lower. The value of the U.S. dollar also slid against other currencies, including the euro and Canadian dollar.

Investors worldwide knew Trump was going to announce a sweeping set of tariffs late Wednesday, and fears surrounding it had already pulled the S&P 500 10% below its all-time high last month. But Trump still managed to surprise them with “the worst case scenario for tariffs,” according to Mary Ann Bartels, chief investment officer at Sanctuary Wealth.

Trump announced a minimum tariff of 10% on imports, with the tax rate running much higher on products from certain countries like China and those from the European Union. It’s “plausible” the tariffs altogether, which would rival levels unseen in roughly a century, could knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5%, according to UBS.

Such a hit would be so frightening that it “makes one’s rational mind regard the possibility of them sticking as low,” according to Bhanu Baweja and other strategists at UBS.

Wall Street had long assumed Trump would use tariffs merely as a tool for negotiations with other countries, rather than as a long-term policy. But Wednesday’s announcement may suggest Trump sees tariffs more as helping to solve an ideological goal – wresting manufacturing jobs back to the United States, for example – than just an opening bet in a poker game.

If Trump follows through on his tariffs, stock prices may need to fall much more than 10% from their all-time high in order to reflect the global recession that could follow, along with the hit to profits that U.S. companies could take because of them.

“Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” said Sean Sun, portfolio manager at Thornburg Investment management, though he sees Trump’s announcement on Wednesday as more of an opening move than an endpoint for policy.

One wild card is that the Federal Reserve could cut interest rates in order to support the economy. That’s what it had been doing late last year before pausing in 2025. Lower interest rates help by making it easier for U.S. companies and households to borrow and spend.

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Yields on Treasurys tumbled in part on rising expectations for coming cuts to rates, along with general fear about the health of the U.S. economy. The yield on the 10-year Treasury fell to 4.02% from 4.20% late Wednesday and from roughly 4.80% in January. That’s a huge move for the bond market.

The Fed may have less freedom to move than it would like, though. While lower rates can goose the economy, they can also push upward on inflation. And worries are already worsening about inflation because of tariffs, with U.S. households in particular bracing for sharp increases. The Fed has no good tool to fix what’s called “stagflation,” where the economy stagnates and inflation stays high.

The economy at the moment is still growing, of course. A report on Thursday said fewer U.S. workers applied for unemployment benefits last week, the latest signal that the job market remains OK overall. Economist had been expecting to see an uptick in joblessness.

But worries about possible stagflation nevertheless knocked down stocks across industries, leading to drops for three out of every four stocks that make up the S&P 500.

Nike fell 12% because so many of its products are made outside the United States. United Airlines lost 10.6% because customers worried about the global economy may not fly as much for business or feel comfortable enough to take vacations. Discount retailer Dollar Tree tumbled 8.5% amid worries that its customers, already squeezed by still-high inflation, may be under even more stress.

Some of the heaviest weights on the market were those that had soared earlier in Wall Street’s frenzy around artificial-intelligence technology. Critics said they were looking the most egregious in a market that overall looked too expensive after prices ran so high in recent years.

Nvidia sank 4.6% to bring its loss for the year so far to nearly 22%. It had more than doubled last year after more than tripling in 2023.

In stock markets abroad, indexes fell sharply worldwide. France’s CAC 40 dropped 2.9%, and Germany’s DAX lost 2.1% in Europe.

Japan’s Nikkei 225 dropped 2.8%, Hong Kong’s Hang Seng lost 1.5% and South Korea’s Kospi dropped 0.8%.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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By ROD MCGUIRK and JAMEY KEATEN, Associated Press

MELBOURNE, Australia (AP) — The Trump administration appears to be leaving no stone unturned with its sweeping tariffs around the globe, from rocky outcrops home to polar bears in the Arctic to tiny tropical islands to a former British penal colony whose leader is befuddled that it was targeted.

The American president rattled markets, manufacturers and more Wednesday announcing a baseline of 10% tariffs on imports into the United States — and far higher on goods from some places, notably those with high trade surpluses with the United States.

A few countries like Russia, which is facing U.S. sanctions, and Canada and Mexico — which face separate U.S. tariff measures — were left off. The Holy See, for example, got a pass too from being listed among the dozens of countries and territories targeted by U.S. President Donald Trump.

Here’s a look at some target territories that have little to no production, exports or role in the global economy. There was no immediate explanation as to why these places made the cut in a list presented on the White House-affiliated “Rapid Response 47” account on the X social media platform.

Jan Mayen

This small Arctic island, possibly featuring more polar bears than people, figures among the more peculiar places on the U.S. target list.

FILE – The meteorological station on the NorwegIan island Jan Mayen in the Arctic Sea on Sept. 23, 2009. (Heiko Junge/NTB Scanpix via AP)

The only inhabitants on Jan Mayen, part of Norway since 1930, are staff of the Norwegian military and the Norwegian Meteorological Institute. The island — 600 kilometers (370 miles) northeast of Iceland — is partly covered by glaciers.

The Norwegian military’s main role there is to oversee Norway’s claim to sovereignty over the island, it flies C-130 Hercules cargo planes to Jan Mayen about a dozen times a year from Norway.

The planes are able to land only if visibility is good as the airport doesn’t have any instrument landing capabilities.

Norway’s Foreign and Environment Ministries did not immediately reply to requests for comment Thursday from The Associated Press.

Tokelau

The nation made up of three tropical coral islands and home 1,500 people on a combined land area of 4 square miles, is also facing 10% U.S. tariffs.

One of the smallest economies in the South Pacific, Tokelau survives on subsistence agriculture, fishing, and finance from New Zealand, which counts the islands as one of its territories.

Roland Rajah, lead economist at the Lowy Institute, an Australian foreign policy think tank, said officials in small island nations would likely struggle to change Washington’s mind.

“If those countries didn’t get much consideration in terms of what tariffs were imposed on them given their size and obscurity to the Trump administration, that also could make it difficult for them to do anything about negotiating their way out of those tariffs,” he said.

Christmas Island

The leader of Christmas Island, which has fewer that 2,000 people, said the Indian Ocean atoll exported nothing to the United States.

FILE – A group of Vietnamese asylum seekers are taken by barge to a jetty on Australia’s Christmas Island on April 14, 2013. (AP Photo, File)

“There’s no trade between Christmas Island and America except that we do buy mining equipment through Tractors Singapore,” said Christmas Island Shire President Gordon Thomson, referring to the regional dealer for the Texas manufacturing giant Caterpillar Inc.

The Australian outpost located 225 miles south of the Indonesian capital Jakarta has used U.S. heavy machinery to mine phosphate for decades.

“The trade, if anything, is U.S. product into Christmas Island. The only thing that we export is phosphate and that goes to Malaysia, Indonesia, maybe Thailand and a bit to the Australian mainland,” Thomson said.

Heard and McDonald Islands

The Heard and McDonald Islands in the remote Antarctic, which together form another Australian territory — this one uninhabited — is also on the list and subject to 10% tariffs.

The mostly barren islands between Madagascar and Antarctica have two active volcanoes and can only be reached by sea.

Contacted by the AP, the Australian government’s Antarctic Division did not immediately respond when asked about how the tariff might affect its operations in the islands.

Norfolk Island

Norfolk Island in the Pacific, another Australian territory with a population of around 2,000 people, received more severe tariff treatment.

The Trump administration, in its calculation, said the former British penal colony charges the United States 58% tariffs — and it responded with a tariff rate of 29% on Norfolk Island, whose economy revolves around tourism. It’s about 1,000 miles east of Sydney.

Norfolk Island Administrator George Plant, the Australian government’s representative on the island, was looking into what was behind it.

“To my knowledge, we do not export anything to the United States,” he told the AP. “We don’t charge tariffs on anything. I can’t think of any non-tariff barriers that would be in place either, so we’re scratching our heads here.”

Speaking to reporters, Australian Prime Minister Anthony Albanese quipped: “I’m not quite sure that Norfolk Island, with respect to it, is a trade competitor with the giant economy of the United States.”

“But that just shows, I think, exemplifies, the fact that nowhere on Earth is exempt from this.”

Keaten reported from Geneva. Charlotte Graham-McLay in Wellington, New Zealand, and Vanessa Gera in Warsaw, Poland, contributed to this report.

By JESSICA DAMIANO, Associated Press

Spring brings the return of color to the garden as bulbs bloom, perennials re-emerge, and new annuals settle in. But there’s a less common category of plants that’s also worth knowing: native spring ephemerals.

Compared to most garden plants, ephemerals are fleeting, but their role in bridging the gap between winter and spring is invaluable.

This June 12, 2017, image provided by Bugwood.org shows turkey corn (Dicentra eximia) blooming at the New York Botanical Garden in The Bronx, N.Y. (Ansel Oommen/Bugwood.org via AP)

Ephemerals come to life in very early spring to take advantage of the season’s increased soil moisture, early spring rains and the availability of sunlight under leafless trees.

They poke up, grow quickly, put on a colorful show and then go dormant all within 6 to 8 weeks, typically from when the last snow melts to when the trees leaf out. And unlike plants that leave fading foliage behind, ephemerals retreat without a trace — or nearly so — allowing you to take advantage of the precious real estate left behind for later-season, shade-loving perennials.

Early food for insects, and a sight for sore eyes

Native ephemerals’ role in nature is to feed starving insects that emerge from dormancy at a time when other food is scarce. But they also provide flowery accents for garden-starved humans at a time when landscape color is scarce.

Plant potted ephemerals or their corms or rhizomes in either spring or early fall. If sowing seeds, do so in late summer or early fall to allow time for growth and root establishment before winter. Either way, select a spot under deciduous trees that receives temporary spring sunlight and has well-draining, acidic soil (exceptions are noted below).

This Sept. 25, 2012, image provided by Bugwood.org shows a white trillium (Trillium grandiflorum) flower blooming in southern Illinois. (Chris Evans/University of Illinois/Bugwood.org via AP)

A generous helping of compost, mixed into the soil, will provide nutrients, and a 2-inch layer of mulch will insulate and protect roots while dormant.

Fertilizer isn’t absolutely necessary, but a dose provided when buds begin to form in spring will boost flower size.

In fall, dig up and divide overgrown ephemerals, if necessary, and give the area a good watering to help prepare them for winter. Because the plants will likely disappear underground by mid-summer, marking their spots with popsicle sticks in spring will make finding them easier.

Here are 10 native spring ephemerals to consider:

Azure bluet (Houstonia caerulea) — Small, pale-blue flower with yellow center and rosette leaves. Sow seeds just below the soil surface. Grow in rock gardens or in the lawn, but don’t mow until plants have set seed for the following year. Grows 8 inches tall.

This June 22, 2005, image provided by Bugwood.org shows ephemeral bluets (Houstonia caerulea L.) (Wendy VanDyk Evans/Bugwood.org via AP)

Bloodroot (Sanguinaria canadensis) — One large, broad leaf and one orange-centered white flower per plant, each on its own stem. Spreads quickly to form a ground cover. Grows 12-14 inches tall.

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Calypso orchid, fairy slipper (Calypso bulbosa) — A single, dainty, purple-magenta-yellow-white blossom atop a slender stem with a single leaf. Thrives best in shade or part shade and can handle alkaline soil. Grows 2-8 inches tall.

Dutchman’s breeches (Dicentra cucullaria) — Deep-cut, feathery foliage, slender stems and drooping, fragrant white flowers. Note to parents and pet owners: All of its parts are toxic, but only if consumed in large quantities; causes minor skin irritation when touched. Beneficial to bumblebees. Grows 10 inches tall.

Fringed bleeding hearts (Dicentra eximia) — Not to be confused with the Asian bleeding heart (Lamprocapnos spectabilis), this U.S. native has light-green, fernlike foliage and clusters of drooping, heart-shaped pink flowers on mounding plants. Thrives in moist, rocky soil and prefers part-shade to shade. Attracts birds. Grows 1-2 feet tall.

Great white trillium (Trillium grandiflorum) — A triplet of oval leaves surrounds a solitary large white flower that turns pink as it matures. Berries and roots have a low toxicity, but only if eaten. Thrives in sun to shade. Grows 1-3 feet tall.

Virginia bluebells (Mertensia virginica) — Pink, but opens to reveal blue flowers on arching, branched stems. Prefers part shade or shade, and moist, rocky soil. A colonizing, rapid spreader. Grows 1-3 feet tall.

This June 5, 2027, image provided by Bugwood.org shows Virginia bluebells (Mertensia virginica) blooming at the New York Botanical Garden in The Bronx, N.Y. (Ansel Oommen/Bugwood.org via AP)

Rue anemone (Thalictrum thalictroides) — Pink or white flowers on maroon stems with whorled leaves. Prefers partly shady conditions. Note to parents and pet owners: All parts of this plant are toxic, but only if eaten in large quantities; contact with sap will cause irritation. Grows 9 inches tall.

Trout lily (Erythronium americanum) — Blotchy leaves and red-tinged, nodding yellow flowers with curled-back petals. Will perform best in full sun but can handle part shade. Does not transplant well, so leave it in place once planted. Grows 8 inches tall.

This June 13, 2006, image provided by Bugwood.org shows yellow trout lily (Erythronium americanum) growing in a field in southeast Michigan. (David Cappaert/Bugwood.org via AP)

Twinleaf (Jeffersonia diphylla) — Each leaf is divided into two lung-shaped leaflets, with white, star-shaped flowers atop leafless flower stalks. Petals are delicate and can be blown off by wind. Grows 1-3 feet tall.

Jessica Damiano writes weekly gardening columns for the AP and publishes the award-winning Weekly Dirt Newsletter. You can sign up here for weekly gardening tips and advice.

By CHRISTOPHER KIMBALL, Associated Press

Naples may be famous for its pizza, but the meatballs are just as deserving of worldwide acclaim. Massive orbs of ground beef are set in a shallow pool of ragù, red and glistening, and are served as often alongside pasta as without. Despite their impressive size, they’re light and ultra-tender, thanks to a high ratio of bread to meat.

In this recipe from our latest cookbook, “Milk Street Backroads Italy,” we use Japanese panko breadcrumbs, which have a neutral flavor and a light and fluffy but coarse texture. It greatly streamlines the meatball-making process, eliminating the need to remove the crusts from fresh bread, soak it in water and squeeze out excess moisture. Panko only needs to be moistened with water and it’s ready to use.

This image released by Milk Street shows a recipe for Neapolitan meatballs with ragu sauce. (Milk Street via AP)

Don’t be shy about mixing the panko-meat mixture with your hands. It takes a few minutes to work the mixture together until homogeneous. To help the meatballs keep their shape, chill them for 15 to 20 minutes before baking.

Neapolitans serve their meatballs with a basic tomato sauce they refer to as “ragù.” After baking, be sure to let the meatballs rest for about 10 minutes before adding them to the sauce. Pecorino is used two ways in this recipe. A chunk is simmered in the sauce, and a portion is grated both in and over the meatballs. Serve with warm, crusty bread or pasta alongside. Though the latter isn’t traditional, it makes a fine accompaniment.

Neapolitan Meatballs with Ragù

This image released by Milk Street shows a recipe for Neapolitan meatballs with ragu sauce. (Milk Street via AP)

Start to finish: 50 minutes

Servings: 6 to 8

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INGREDIENTS

4 tablespoons extra-virgin olive oil, divided, plus more to serve 1 large yellow onion, finely chopped

Kosher salt and ground black pepper

6 medium garlic cloves, finely grated

1½ teaspoons red pepper flakes, divided

6½ ounces (2½ cups) panko breadcrumbs

3 ounces pecorino Romano cheese, 2 ounces finely grated (1 cup), 1 ounce as a chunk, plus more grated, to serve

1 large egg, plus 1 large egg yolk, beaten together

1½ pounds 90 percent lean ground beef

Two 28-ounce cans whole peeled tomatoes

6 to 8 large basil leaves

Directions

Heat the oven to 475°F with a rack in the middle position. Line a rimmed baking sheet with kitchen parchment and mist with cooking spray. In a large Dutch oven over medium-high, heat 2 tablespoons of the oil until shimmering. Add the onion and ¼ teaspoon salt, then cook, stirring occasionally, until softened, about 5 minutes. Add the garlic and 1 teaspoon of the pepper flakes; cook, stirring, until fragrant, about 30 seconds. Remove from the heat, then transfer half of the onion mixture to a large bowl.
In a medium bowl, combine the panko and 1¼ cups water; press the panko into the water and let stand until fully softened, about 5 minutes. Mash with your hands to a smooth paste, then add to the bowl with the onion mixture. Using a fork, mix until well combined and smooth. Stir in the grated cheese, beaten eggs, remaining 2 tablespoons oil, ¾ teaspoon salt and 2 teaspoons black pepper. Add the meat and mix with your hands until completely homogeneous.
Using a ½-cup dry measuring cup, divide the mixture into 8 portions. Using your hands, shape each into a compact ball and place on the prepared baking sheet, spacing them evenly apart. Refrigerate uncovered for 15 to 20 minutes. Re-shape the meatballs if they have flattened slightly, then bake until lightly browned, about 20 minutes. Let cool on the baking sheet set on a wire rack for about 10 minutes.
While the meatballs cook, in a food processor or blender, puree the tomatoes with their juices one can at a time, until smooth, about 30 seconds, transferring the puree to a large bowl. Return the Dutch oven to medium and heat the remaining onion mixture, stirring, until warmed through, about 2 minutes. Stir in the tomatoes, remaining ½ teaspoon pepper flakes, the basil and the chunk of cheese. Bring to a simmer over medium-high and cook, stirring occasionally, until slightly thickened, about 15 minutes. Taste and season with salt and pepper.
Using a large spoon, carefully transfer the meatballs to the sauce, then, using 2 spoons, turn each to coat. Bring to a gentle simmer, then reduce to medium-low, cover and cook for 5 minutes. Remove the pot from the heat and let stand, covered, for about 5 minutes to allow the meatballs to firm up slightly. Remove and discard the pecorino chunk. Serve with additional grated cheese.

EDITOR’S NOTE: For more recipes, go to Christopher Kimball’s Milk Street at 177milkstreet.com/ap