U.S. Stocks Decline Amid Trade Tensions and Tariff Updates
The U.S. stock market experienced a considerable downturn on Thursday, reversing some of the gains seen in the previous day’s rally. Investors reacted negatively to President Donald Trump’s recent announcement regarding tariffs on China, which complicated the ongoing trade war.
Market Overview
Following the market opening, the White House confirmed that U.S. tariffs on Chinese goods have surged to 145%, exceeding the previously reported 125% rate. This revelation contributed to a notable decline in stock prices throughout the day.
- The Dow Jones Industrial Average fell by 1,014 points, equating to a 2.5% decrease.
- The S&P 500 experienced a drop of 3.4%.
- The Nasdaq Composite saw the steepest decline, plummeting by 4.3%.
Stocks of major corporations were hit particularly hard, with Nike’s shares dropping by 8%, while Tesla and Nvidia saw declines of 7% and 5%, respectively. Contrary to the overall market trend, telecom giants AT&T and Verizon managed to record modest gains, each rising by over 0.75%.
International Response
In response to Trump’s tariff hike, Beijing condemned the U.S. action, announcing a restriction on imports of Hollywood films as part of their retaliatory measures. “The U.S. is wielding tariffs as a weapon to exert maximum pressure and seek selfish gains,” stated Chinese Foreign Ministry spokesperson Lin Jian.
The rapid downturn in U.S. stocks has wiped out the previous day’s impressive rally, where the Nasdaq surged by 12.1%, marking its largest one-day gain since 2021. Likewise, the Dow had seen its most significant single-day increase in five years, jumping 7.8%.
Details of the Tariff Updates
On Wednesday, President Trump had announced a 90-day suspension on heightened tariffs for most countries while maintaining a 10% baseline tariff across the board. However, he also declared an increase in tariffs on Chinese goods from 104% to 125%, further exacerbating trade tensions between the two nations.
Global Market Reactions
Before the downturn in U.S. markets, Asian and European stock exchanges were experiencing a rebound. Major Asian indices, including Japan’s Nikkei 225 which closed up 9.1%, and South Korea’s Kospi which increased nearly 6.6%, displayed notable recoveries following a tumultuous week marked by fears of escalating trade wars.
- Taiwan’s Taiex index rose by 9.3%.
- Australia’s ASX 200 climbed 4.5%.
European markets mirrored these trends; the pan-continental STOXX 600 index rose more than 7% after the European Union announced a 90-day pause on retaliatory tariffs targeting U.S. imports. Key indices such as the FTSE 100, CAC 40, and DAX also reported substantial gains, ranging between 6% to 8%.
Conclusion
The current market situation reflects the heightened anxieties surrounding U.S.-China trade relations, coupled with the immediate impacts felt across global stock exchanges. Investors will be watching closely as future developments unfold in this ongoing economic landscape.