US stocks surrendered a chunk of their historic gains from the day before on Thursday as President Trump's trade war continues to threaten the economy.
- The S&P 500 fell 188.85 points, or 3.5%, to 5,268.05, slicing into Wednesday's surge of 9.5%.
- The Dow Jones Industrial Average dropped 1,014.79 points, or 2.5%, to 39,593.66.
- The Nasdaq composite fell 737.66 points, or 4.3% to 16,387.31.
China announced more countermeasures against the US, and losses for stocks accelerated after the White House clarified that it
will tax Chinese imports at 145%, not the 125% rate Trump had earlier written about. The swings also hit the bond market despite a better-than-expected report on inflation. The
AP reports that the Labor Department said consumer prices rose just 2.4% in March from a year earlier, down from 2.8% in February. That's the lowest inflation figure since September.
"Trump blinks," UBS strategist Bhanu Baweja wrote in a report about the president's decision on tariffs, "but the damage isn't all undone." Even if the tariffs on Chinese imports were to get negotiated down to something like 50%, and even if only 10% tariffs remained on other countries, Baweja said the hit to the US economy could still be large enough to hurt expected growth for upcoming US corporate profits. "Everything is still very volatile, because with Donald Trump, you don't know what to expect," said Francis Lun, chief executive of Geo Securities. "This is really big uncertainty in the market. The threat of recession has not faded."
China, meanwhile, has reached out to other countries around the world in apparent hopes of forming a united front against Trump, the AP reports. Warner Brothers Discovery, the company behind A Minecraft Movie, dropped 12.5% for one of Wall Street's sharpest losses after China said Thursday it will "appropriately reduce the number of imported US films." The Walt Disney Co.'s stock sank 6.8%. A spokesperson for the China Film Administration said it is "inevitable" that Chinese audiences would find American films less palatable given the "wrong move by the US to wantonly implement tariffs on China."
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