On Wednesday, Trump paused some tariffs but escalated a trade war with China.
U.S. stocks plunged in on Thursday, wiping away half of the previous day’s rally as investors digested President Donald Trump’s decision to suspend some tariffs while escalating a trade war with China.
Hours after markets opened, the White House said U.S. tariffs on China stand at 145%, more than the 125% levy that had been widely reported a day earlier.
The news sent shares falling further than they had earlier in the day.
The Dow Jones Industrial Average dropped 1,790 points, or 4.4%, while the S&P 500 fell 5.2%. The tech-heavy Nasdaq plunged 6.2%.
Footwear giant Nike, which boasts a sprawling global supply chain, saw shares plummet 10%.
Tesla, the electric carmaker led by Trump-adviser Elon Musk, fell 9%. Shares of chipmaker Nvidia dropped 8%.
Some major companies extended gains from a day earlier.
Telecoms AT&T and Verizon each ticked up more than 0.5%.
China rebuked the U.S. early Thursday morning in response to Trump’s decision to hike cumulative tariffs on Chinese goods to 145%. Beijing said it would restrict imports of Hollywood films.
The U.S. is wielding “tariffs as a weapon to exert maximum pressure and seek selfish gains,” Chinese Foreign Ministry spokesperson Lin Jian told reporters at a Thursday briefing.
Stock market losses early on Thursday erased some of the historic rally on Wednesday, set off by Trump’s tariff announcement. The Nasdaq soared 12.1% at Wednesday’s close, the index’s largest single-day gain since 2021. The Dow jumped 7.8%, its biggest one-day increase in five years.
On Wednesday afternoon, Trump announced a 90-day pause on the higher tariffs for most countries that he announced last week, while maintaining a 10% baseline tariff across the board.
Trump also announced additional tariffs on China, increasing the cumulative tariffs on Chinese goods from 104% to 125%.
Before the downturn in U.S. shares, Asian and European markets rallied on Thursday.
Key Asian indices recorded notable recoveries on Thursday — marking a reprieve for most after a week of turbulence and selloffs driven by fears of escalating trade wars and recessions.
In Japan, the Nikkei 225 closed 9.1% and the broader TOPIX index closed up 8%. South Korea’s Kospi closed up nearly 6.6%.
Taiwan’s Taiex index jumped 9.3% and Australia’s ASX 200 rose 4.5%.
Key Chinese markets were also in the green, despite Trump’s decision to raise tariffs on Chinese goods to a total of 125%. The president alleged a “lack of respect” from Beijing, his latest broadside coming after China announced 84% reciprocal tariffs on U.S. goods on Wednesday.
Hong Kong’s Hang Seng Index climbed 2%, the Shanghai Composite Index jumped 1.1% and the Shenzhen Component Index rose 2.2%.
In Europe, the pan-continental STOXX 600 index jumped more than 7%. On Thursday, the European Union announced a 90-day pause in retaliatory tariffs targeting the U.S., which the EU had approved a day earlier.
Upon opening, Britain’s FTSE 100 climbed 6%, France’s CAC 40 6.4%, Germany’s DAX 8%, Italy’s FTSE MIB 7.5% and Spain’s IBEX 7.2%.
Source: abcNEWS
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