Wall Street Sees Decline Following Brief Relief
U.S. stock markets retreated Thursday, erasing some of the previous day’s gains triggered by President Donald Trump’s temporary pause on new tariffs. The S&P 500 fell by 4.0%, the Nasdaq slid 4.8%, and the Dow dropped 2.8% as investors assessed the broader implications of the ongoing trade war.
Tariff Freeze Offers Only Temporary Calm
Trump announced Wednesday that many of his sweeping tariffs on global partners would be delayed by 90 days. The move brought short-term relief to global markets but did not include higher duties recently imposed on Chinese imports, which rose to 145% in response to China’s 84% countermeasures.
EU and Global Response
The European Union stated it would temporarily hold off on implementing its own retaliatory tariffs while awaiting the outcome of further negotiations. European Commission President Ursula von der Leyen expressed hope for a diplomatic resolution but warned countermeasures could resume if talks falter.
U.S. Seeks Deals Amid Market Uncertainty
White House economic adviser Kevin Hassett said over a dozen countries have offered trade proposals, which the U.S. is reviewing. Treasury Secretary Scott Bessent downplayed the stock drop, emphasizing that successful negotiations could stabilize trade policy.
Talks with Vietnam are set to begin following discussions between Bessent and Vietnamese Deputy Prime Minister Ho Duc Phoc.
Mixed Economic Signals
Despite new data showing a surprising drop in U.S. consumer prices in March, markets reacted negatively, largely due to fears that tariffs on China would drive prices up again in the near future. Yale University researchers reported that average effective tariff rates are now at a century-high.
China Maintains Firm Stance
China responded to Trump’s higher tariffs by reaffirming its intent to defend its economic interests. Commerce Ministry spokesperson He Yongqian stated China is open to talks but will not accept pressure or threats.
Meanwhile, the Chinese yuan hit its lowest level against the U.S. dollar since the global financial crisis, reflecting growing investor concerns.
Bond and Oil Markets React
Yields on U.S. Treasury bonds rose earlier this week, which some analysts believe prompted Trump’s partial tariff pause to prevent financial instability. Oil prices dropped over 3% Thursday as recession fears and the trade dispute overshadowed previous optimism.
Outlook Remains Volatile
Although Trump suggested that a positive resolution with China is possible, uncertainty continues to weigh on markets. Central banks and investors remain cautious, with European officials warning that sustained instability could undermine economic recovery.
