US stocks sunk on Thursday, giving back some of the huge gains that followed President Donald Trump’s decision to temporarily lower his sweeping tariffs on dozens of countries, as investors assessed the status of his global trade war.
Trump’s sudden decision on Wednesday to freeze most of his hefty new duties for 90 days brought relief to battered markets and anxious global leaders, even as he ratcheted up a trade war with China.
But his whipsaw approach still has companies worried about the potential fallout and scrambling to prepare for what could happen in three months.
The S&P 500 index was down 5.2 percent on Thursday afternoon, while the Nasdaq dropped 6.1 percent and the Dow Jones Industrial Average was down 4.5 percent.
Speaking at a cabinet meeting, Trump reiterated that there would continue to be “transition difficulty” in the days ahead.
His sudden decision to freeze most of his hefty new duties for 90 days brought relief to battered markets and anxious global leaders, even as he ratcheted up a trade war with China.
In Europe, eurozone government bond yields jumped, spreads tightened, and markets scaled back their bets on European Central Bank rate cuts after Trump’s latest announcement. European shares surged.
The European Union said it would put plans to impose retaliatory tariffs on hold for 90 days. It had been due to launch counter-tariffs on about 21 billion euros ($23.25bn) of US imports next Tuesday in response to Trump’s 25-percent tariffs on steel and aluminium. It is still assessing how to respond to US car tariffs and the broader 10 percent levies that remain in place.
“We want to give negotiations a chance,” European Commission President Ursula von der Leyen said on X.
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