NEW YORK: Global stock markets fell on Thursday, erasing much of the previous session’s massive gains, as investor relief over US President Donald Trump’s decision to pause a raft of tariffs faded amid lingering uncertainty over global trade policy.
The Nasdaq Composite led declines on Wall Street, sliding 3.46% in early trade, while the Dow Jones Industrial Average dropped 2.30% and the S&P 500 fell 2.81%.
The pullback followed a dramatic surge on Wednesday that had seen the S&P 500 jump by 9.5%—its biggest single-day percentage gain in years—after Trump announced a 90-day suspension of certain tariffs on many US trading partners.
Market enthusiasm was short-lived, however, as concerns mounted over the limited scope of the pause and the president’s decision to raise tariffs on Chinese imports to 125%.
“The market is taking back some of yesterday’s rip-your-face-off rally because they realise the relief is not as great as they thought,” said Jake Dollarhide, Chief Executive Officer of Longbow Asset Management in Tulsa, Oklahoma.
“All things being equal, if tariffs are paused and inflation is going lower, it’s green light go if you’re an investor. But uncertainty persists.”
The dollar also weakened on Thursday. It fell nearly 2% against the Japanese yen to 144.86, while the euro strengthened 1.73% against the greenback.
China’s onshore yuan initially slid to 7.3518 per dollar—its weakest level since 2007—before recovering.
The US Treasury market stabilised after days of sharp selling that evoked memories of the COVID-era “dash for cash.”
Analysts attributed the previous selloff to hedge funds and asset managers liquidating positions amid margin calls.
On Thursday, the yield on the benchmark 10-year Treasury note eased 4.7 basis points to 4.349%.
Commodity markets were also under pressure. US crude dropped 4.33% to $59.65 a barrel, while Brent crude fell 3.88% to $62.94.
Data released earlier in the day offered some encouragement, with US consumer prices rising by 2.4% in March compared to a year ago—below the 2.6% analysts had expected.
Nonetheless, the inflation relief did little to offset broader concerns about trade policy and its impact on the global economy.
Investors are also bracing for the start of US earnings season, with major banks such as JPMorgan Chase set to report results on Friday.
Global equities had soared on Wednesday in response to Trump’s surprise tariff reversal, with Asian and European indices posting strong gains.
Japan’s Nikkei jumped 9.1%, while South Korea’s Kospi rose 6.6%, and Taiwan’s market rebounded 9.25% after steep losses earlier in the week.
In Europe, the FTSE 100 gained over 3%, and Germany’s DAX and France’s CAC 40 also rose sharply.
However, Thursday’s mood was more cautious. MSCI’s index of global stocks edged down 0.35%, and the gains in Europe moderated, with the STOXX 600 up only 4.32% after stronger rallies a day earlier.
Despite the temporary suspension of some tariffs, a 10% blanket duty on nearly all U.S. imports remains in place, the White House confirmed.
Duties on autos, steel and aluminium are also unaffected. Tariffs on Chinese goods have instead been increased.
Speaking in the Oval Office, Trump reiterated that he expected Beijing to return to the negotiating table.
“President Xi’s a very smart guy and I think we’ll end up making a very good deal,” he said. “I can’t imagine” further hikes would be necessary, he added.
China responded sharply. Foreign Ministry spokesman Lin Jian said, “Tariff wars and trade wars have no winners.
China does not want to fight them, but will not fear when they come our way.”
Beijing announced retaliatory duties of 84% on US imports and warned it was prepared to escalate if necessary.
Goldman Sachs revised its forecast for China’s 2025 GDP growth downward from 4.5% to 4% in response to the new US tariffs.
European leaders welcomed Trump’s pause but remained wary.
European Commission President Ursula von der Leyen said on Thursday that the EU would suspend its retaliatory tariffs for 90 days to allow space for negotiations, although duties on US steel and aluminium will remain.
“Clear, predictable conditions are essential for trade and supply chains to function,” von der Leyen said. She warned that if talks fail, the EU’s countermeasures would be implemented.
