At the close, the broad OMXS-index had fallen 3.4 percent. The OMXS30 index, comprising the most traded shares, had an even tougher time, noting a minus 3.8 percent.
The decline was widespread among the major companies. Among the few that went against the trend was the defense group Saab, up 6.3 percent. This followed Colombian President Gustavo Petro's announcement that the country would purchase the Swedish fighter jet Gripen.
Hygiene company Essity was also traded on the plus side, rising 2.2 percent.
Heavy falls
The heaviest fall was AB Volvo, down 12.4 percent, likely due to the fact that the truck manufacturer's share was traded without the right to dividend during the day.
The leading stock exchanges in Europe also fell. At the close in Stockholm, London's FTSE 100-index had fallen 1.5 percent, the DAX-index in Frankfurt 2.8 percent, and the CAC-index in Paris 3.2 percent.
The development is also bleak on Wall Street in the USA. The three major indexes are down between 3.4 and 5.1 percent.
Gold more expensive
The negative stock market reactions come after US President Donald Trump announced late on Wednesday that the USA would impose tariffs of 20 percent on goods from the EU and confirmed that previously announced tariffs of 25 percent on all foreign-built vehicles would come into effect.
Following the tariff announcement, the Swedish krona has strengthened, and one dollar now costs 9.73 kronor. One euro costs 10.77.
Gold, which historically is a safe haven for investors in times of turmoil, saw a price surge after Trump's announcement. One ounce of gold now costs 3,107 dollars.
