Stocks declined on Thursday as market participants gave back some of the gains from the previous session's historic surge after President Donald Trump announced a 90-day pause on some of this tariffs. The Dow Jones Industrial Average lost over 1,000 points, while the S&P 500 Index and Nasdaq Composite each dropped about 4%.
Here's how the market settled on Thursday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
The White House confirmed on Thursday that total tariffs on Chinese imports will now by 145%, adding the 20% previous charged in response to the fentanyl crisis on top of the new 125% rate announced Wednesday. Trump also raised a separate duty on inbound packages from Beijing valued at $800 or less to 120% starting May 2, effectively eliminating the so called deminis tariff expectation.
Trump's executive order signed Wednesday also increases the "per postal item" cost for low-value shipments to $100 starting May 2, and rising to $200 on June 1.
This ruling directly impacts China-based online retailers like Shein and PDD Holding's
Other tariffs still in effect include 25% duties on aluminum, autos, and other goods from Canada and Mexico not covered by the United States- Mexico-Canada Agreement, as well as 10% tariffs on all other imports.
Deutsche Bank Head of FX Research George Saravelos wrote in a late Wednesday note to clients that even as Trump eases on some of his trade policies, "the damage has been done," when it comes to global business and consumer confidence.
"Even if the tariffs are permanently suspended, damage has been done to the economy via a permanent sense of unpredictability in policy," Saravelos. "The events of the last few weeks will resonate amongst global economic partners during the upcoming negotiations on trade and indeed for many years to come. The desire to build greater strategic independence from the U.S. across all fronts will be here to stay."
Kansas City Federal Reserve President Jeffrey Schmid said in prepared remarks on Thursday that the central bank will be keen to adapt policy to inflation threats rather than the fundamentals like slowing growth when they make further decisions on interest rates.
"One enduring lesson of the high inflation period of the 1970s and early 1980s was that once inflation is embedded in expectations, it becomes much more difficult to contain," Schmid told his home district. "Now, with renewed price pressures likely, I am not willing to take any chances when it comes to maintaining the Fed's credibility on inflation."
Consumer Prices unexpectedly declined in March, the Bureau of Labor Statistics reported Thursday, offering a bright spot amid heightened uneconomic uncertainty. However, the report also suggested that demand was softening as recession fears grip both consumers and business owners.
The consumer price index (CPI) ticked 0.1% lower, marking its first decline since May 2020 and falling from February's gain of 0.2%. Annually, the CPI rose 2.4% in March after rising 2.8% in February. Core CPI, which excludes volatile food and energy prices, gained 0.1% on the month and 2.8% year-over-year, compared with February's gains of 0.2% and 3.1%, respectively.
