Wall Street’s main indexes fell on Thursday, coming off a blistering rally following U.S. President Donald Trump’s move to temporarily lower the heavy tariffs on dozens of countries.
The U-turn came less than 24 hours after the new tariffs took effect on most trading partners, lifting the S&P 500 to its biggest single-day percentage gain since 2008 on Wednesday. The Nasdaq posted its biggest one-day jump since 2001.
Trump also announced a 90-day pause on many of his new reciprocal tariffs, but raised them to 125% on Chinese imports from 104%. Beijing had slapped 84% tariffs on U.S. imports to match Trump’s earlier levy.
The European Union said it had agreed on a 90-day pause on counter tariffs on U.S. goods, which were due on April 15.
At 09:35 a.m. the Dow Jones Industrial Average fell 718.88 points, or 1.77%, to 39,889.57, the S&P 500 lost 122.54 points, or 2.25%, to 5,334.36 and the Nasdaq Composite lost 457.83 points, or 2.67%, to 16,667.14.
Most S&P 500 sectors were in the red. Information technology and energy led the losses, falling 3.5% and 3.9%, respectively. Consumer staples was the only sector that saw gains.
Wall St rallies after sharp losses on hopes of tariff talks
Most megacap and growth stocks slid, with Tesla and Nvidia down more than 4% each.
The CBOE Volatility Index – seen as Wall Street’s “fear gauge” – fell from its August highs, but was last up at 36.17 points. The small-cap Russell 2000 was down 2.9%.
Meanwhile, data showed the consumer price index unexpectedly dipped 0.1% in March, in line with estimates and advanced 2.4% in the 12 months through March, compared with expectations of a 2.6% climb, according to economists polled by Reuters.
“We remain circumspect regarding the current inflation data, as these figures are reflective of a period prior to the implementation of recent tariffs,” said Dan Siluk, portfolio manager at Janus Henderson.
“We expect more volatility from inflation reads in the months ahead.”
Traders now see nearly 90 basis points of interest-rate cuts in 2025, according to LSEG data.
Despite Wednesday’s surge, the S&P 500 and the Dow are about 5% below levels seen before the reciprocal tariffs were announced last week.
Meanwhile, U.S. bonds markets were sanguine after a sharp selloff in the last session, with the yield on the 10-year note dropping to 4.302% from its February peaks.
Automakers General Motors and Ford fell about 3% each after the previous session’s gains. Downgrades from UBS and Goldman Sachs on the stocks added to their declines.
Investors will keep a close watch on comments from Fed officials who are also set to make public appearances throughout the day.
U.S. earnings season could also offer more insights into the health of corporate America. Big banks such as JPMorgan Chase will report first-quarter results on Friday.
Declining issues outnumbered advancers by a 7.81-to-1 ratio on the NYSE and by a 3.69-to-1 ratio on the Nasdaq.
The S&P 500 posted no new 52-week highs and no new lows while the Nasdaq Composite recorded one new high and 17 new lows.
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