On Thursday (April 10), major U.S. stock indexes fell sharply, reversing a historic rally from the previous day. The S&P 500 dropped more than 4%, while the Nasdaq Composite tumbled 4.7%. The Dow Jones Industrial Average fell nearly 1,300 points, or 3.3%. This decline follows President Donald Trump's decision to temporarily pause tariffs on many U.S. trading partners, which had sparked a significant market rally.
The market's downturn was triggered by the White House's confirmation that tariffs on Chinese goods have increased to 145%, not 125% as previously reported. This escalation in the U.S.-China trade war has raised concerns about potential impacts on the U.S. economy, including rising prices and slower growth. The bond market also experienced volatility, with the 10-year Treasury yield falling to around 4.39%.
Despite the temporary tariff pause, other trade measures remain in effect, including a 10% baseline tariff on most trading partners and 25% duties on steel, aluminum, and auto imports.
The market's reaction highlights the uncertainty surrounding trade policies and their potential impact on global markets. Investors remain cautious as they navigate the complexities of the current economic landscape.
"Investors are still uncomfortable with it, because they don't know what the end game is," said Paul Nolte, senior wealth advisor at Murphy & Sylvest in Elmhurst, Illinois, per Reuters. "I think what we're seeing, still, is investor concern about tariffs and that is pretty much front and center for everything."