The US stock market tumbled deeply into the red on Thursday as President Trump’s plan for a massive 145% tariff on China was clarified, escalating a trade war. The Dow Jones Industrial Average fell 1,015 points or 2.5%, pulling back after tumbling as much as 2,100 points midday.
The S&P 500 and Nasdaq Composite also plummeted, with the S&P 500 falling 3.46% and the Nasdaq sliding 4.31%. The market had seen its best day since 2008 on Wednesday, but a victory lap was short-lived as Trump acknowledged “transition problems” could be expected.
The US dollar index tumbled to below $1.10, while oil prices remained under pressure. However, global markets recovered sharply Thursday, with Japan’s benchmark Nikkei 225 index finishing more than 9% higher and European stocks surging after the European Commission paused retaliatory tariffs.
China has not backed down in its trade war with the US, with retaliatory 84% tariffs on US imports to China going into effect. Beijing reiterated that it will not back down if Trump further escalates the conflict.
“The door to talks is open, but dialogue must be conducted on the basis of mutual respect and equality,” a Chinese spokesperson said. “We hope the US will meet China halfway and work towards resolving differences through dialogue and consultation.”
The pause in tariffs has sparked optimism among some investors, who had been pressuring Trump to back off his punishing measures. However, signs of stress remain in markets beyond just stocks, with the bond market still signaling that the pause is significant.
“Bonds are signaling that the pause is significant, yet not much has fundamentally changed,” said ING analysts.
Source: https://edition.cnn.com/2025/04/10/investing/us-stock-market-dow-tariffs/index.html