Even after a massive rally on Wednesday, the stock market is on sale again – Country
Starting the day before, U.S. stocks returned a portion of their historical gains on Thursday as Wall Street weighed a global trade war that cooled in temperature but was still threatening the economy.
The S&P 500 fell 3%, which is 9.5% a day after President Donald Trump decided to suspend many global tariffs.
The Dow Jones industrial average fell by 981 points, or 2.4%, and Nasdaq Composites fell by 3.7% as of 10:10 a.m. ET.
The Toronto Stock Exchange fell nearly 2.5%.
Even the report on inflation on Thursday morning wasn't enough than expected to get us to increase stocks the day before, including the third best for the S&P 500 since 1940.
The data is not very useful because it only provides past views, as inflation may increase in the coming months due to tariffs, economists say.
Reports about the unemployed are not much more helpful than expected, and Wall Street is totally focused on what is about to happen.
“Trump winks,” UBS strategist Bhanu Baweja wrote in a report on the president's decision to tariffs.
Trump is focusing more on China, raising tariffs on his products to 125%.
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Even if that is to drop to 50%, even if only 10% of tariffs are still in other countries, the blow to the U.S. economy is still big enough to hurt the expected growth of upcoming U.S. corporate profits, Baweja said.
At the same time, China has contacted other countries around the world and hopes to form a unified front with Trump. However, the EU said on Thursday it would suspend its trade retaliation measures for 90 days and leave room for a solution.
Trump and his Treasury Secretary Scott Bessent sent a clear message to other countries after announcing a tariff pause: “Don't retaliate, you'll get rewards.”
Many on Wall Street are preparing for more wild swings in the market as the S&P 500 has almost fallen into a “bear market” almost below its record, almost falling to 20%.
Usually, the whip movements occur not only every day, but every hour. The S&P 500 remains below the series of tariffs announced last week by Trump on Liberation Day.
“Everything is still very volatile because for Donald Trump, you don't know what will happen,” said Francis Lun, CEO of Geo Securities. “It's really a lot of uncertainty in the market. The threat of recession has not gone away.”
But an encouraging signal comes from the bond market where pressure seems to be easing.
The bond market has always played the role of executors in politicians and economic policies. For example, it helped Liz Truss of the UK in 2022, whose 49 angels her UK position as the shortest Prime Minister.
James Carville, an adviser to former U.S. President Clinton, also famously stated that he hopes to be reincarnated into the bond market because of how powerful it has.
Earlier this week, the huge jump in U.S. fiscal yields had shaken the market so much that Trump said on Wednesday that he had been watching investors “a bit of discomfort.”
There may be several reasons behind the sharp, sudden rise, including investors whose hedge funds have to sell their Treasury Department to raise cash or abandon U.S. investment due to the trade war.
Regardless of the reason behind it, the U.S. Treasury has a higher yield, putting pressure on the stock market and raising rates for mortgages and other loans to U.S. households and businesses.
But the decade-long fiscal yield calmed down on the last day, accounting for 4.30%. This is after the increase from just 4.01% last weekend's 4.01% to nearly 4.50%.
In foreign stock markets, indexes European and Asian rallies that traded for the first time after Trump paused. Japan's Nikkei 225 surged 9.1%, South Korea's Kospi jumped 6.6%, and Germany's DAX returned 5.2%.
– Files with Ari Rabinovitch from Global News
& Copy 2025 Canadian Press
