U.S. stocks took a sharp turn downward on Thursday, erasing some of the massive gains from the previous day’s historic rally, as uncertainty over trade tariffs resurfaced.
The Dow Jones Industrial Average dropped 1.8% to 39,859.39 just 15 minutes after the opening bell. The S&P 500 fell 2.2% to 5,335.61, while the tech-heavy Nasdaq Composite Index slid 2.8% to 16,653.99.
Wednesday’s surge had been one of the biggest single-day gains in Wall Street history, fueled by optimism after U.S. President Donald Trump appeared to soften his stance on trade tariffs. However, investors quickly grew cautious as doubts emerged about the longevity and impact of these tariff adjustments.
“The pullback isn’t surprising,” said Patrick O’Hare, an analyst at Briefing.com. “Many participants saw yesterday’s gains as an opportunity to recover from the recent tariff-induced sell-off. Now, they’re opting to exit positions, realizing that the economic and earnings uncertainties haven’t been fully resolved.”
Adding to the market jitters, U.S. consumer inflation dipped 0.1% from the previous month, falling short of analyst expectations. While some market watchers believe this could increase the chances of the Federal Reserve cutting interest rates, others see it as a secondary concern overshadowed by trade issues.
The renewed tension stems from Trump’s tariff actions earlier in the week, which had rattled global markets and boosted yields on U.S. Treasury bonds. These moves are seen by some analysts as critical factors influencing the current volatility.
Global markets are closely watching the developments, as shifts in U.S. trade policy can have ripple effects worldwide, impacting economies in the Global South and beyond.
