U.S. stocks fell sharply as tariff news weighed on the market again, just a day after the market had one of its best performances on record.
The S&P 500 ( GSPC ) fell nearly 3.5%, and the tech-heavy Nasdaq Composite ( ^IXIC ) fell 4.3%. The Dow Jones Industrial Average ( ^DJI ) fell 1,014 points, or 2.5%. The 10-year Treasury yield ( ^TNX ) closed flat around 4.39%, in the spotlight amid bond market turmoil and its role in Trump’s decision to roll back full reciprocal tariffs.
On Thursday, the White House confirmed that total tariffs on Chinese goods will be 145%, taking into account the 20% tariffs that were already in place. The news came as a surprise to some investors, as President Trump said in a Truth Social post on Wednesday that tariffs on China would be 125%.
Stocks quickly fell to intraday lows following the news.
“Today’s continued move lower suggests that there is still a lot of uncertainty,” wrote Eric Criscuolo, market strategist at the New York Stock Exchange, in a midday trading update Thursday afternoon.
The volatility of afternoon trading occasionally showed signs of recovery. But a close at session lows is little comfort to a market that continues to be buffeted and pressured by relentless tariff news.
After a wild rally on Wednesday that saw the S&P 500 post its biggest one-day gain since 2008, stocks were a little weaker Thursday.
Futures tied to the major indexes fell 1% ahead of the release of the March Consumer Price Index (CPI) at 8:30 a.m.
The report showed that “core” prices, excluding the volatile food and energy categories, rose 2.8% in March, the smallest annual gain in four years. The reading was well below Wall Street’s expectations of 3%. Better-than-expected inflation data has typically led to a stock market rally since the Fed began its fight against inflation.
Not in this market.
Stocks sold off at the open, extending losses as the White House confirmed that U.S. tariffs on Chinese goods have reached 145%.
In terms of individual stocks, the biggest gainers on Wednesday also fell the most on Thursday. Tesla (TSLA) rose more than 20% on Wednesday but fell 7.3% on Thursday. Nvidia (NVDA) fell 5.9% on Thursday after surging 18% the day before.
“Financial markets are getting hammered, and it’s because of the public policy mess,” Michael Dada, chief economist and macro strategist at Ross Capital Partners, told Yahoo Finance.
The latest tariff news highlights two realities in the current market.
First, overall tariff rates remain at their highest level in more than a century. The Yale Budget Lab currently estimates that the U.S. effective tariff rate is 27%. After Trump’s “Liberation Day” tariff announcement, the Yale Budget Lab had estimated that the U.S. effective tariff rate was 22.5%.
The announcement also reminded investors that Wednesday’s celebration was to “postpone” tariffs.
It remains to be seen what exactly happens over the next 90 days, but it seems unlikely that tariffs will disappear from the discussion.
As Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, told Yahoo Finance on Thursday, “There’s more uncertainty as we negotiate and figure out exactly what’s going to happen at the end of the next 90 days.”
Related topics:
