Stan Choe, AP Business Writer
NEW YORK (AP) – US stocks have surrendered more than half of their historic profits since the day before, as President Donald Trump’s trade war continues to disrupt and threaten the economy, even if the temperature cools a little.
The S&P 500 fell 5% in noon trading and sliced into a 9.5% surge on Wednesday following Trump’s decision to suspend many tariffs around the world. The Dow Jones industrial average fell 1,701 points (4.2%) as of 12:10 PM Eastern time, with Nasdaq’s composites 5.7% lower.
UBS strategist Bhanu Baweja wrote in a report on the president’s decision on tariffs that “blinks” and “but all the damage will not be cancelled.”
Trump is more focused on China, far exceeding 100% of tariffs on its products. Even if it was negotiated for something like 50%, even if there were only 10% tariffs left in other countries, Baweja said the blow to the US economy could be so great that it would damage the expected growth in profits for US companies in the future.
U.S. stock losses accelerated Thursday after the White House revealed that Chinese imports would be involved in 145%. This wasn’t the 125% rate Trump posted on True Social Wednesday, not the 125% rate, and not the 125% rate Trump posted after the previous 20% fentanyl tariffs.
“We are pleased to announce that we are committed to providing a range of services and services to our customers,” said Francis Lun, CEO of Geo Securities. “This is a really big uncertainty in the market. The threat of a recession has not disappeared.”
Meanwhile, China is reaching out to other countries around the world in clear hopes of forming a united front against Trump.
Shares of Warner Brothers Discovery, the company behind “Minecraft Movie,” fell 13.5% in one of Wall Street’s most sharp losses after China said Thursday it would “reduce the number of imported US films properly.” Walt Disney’s stock price sank 7.6%
A spokesman for the Chinese film administration said it was “inevitable” that Chinese audiences would find American films less appealing given the “mistakes by the US in hoping to get tariffs on China.”
That came after Trump and his Treasury Secretary, Scott Bescent, sent a clear message to other countries on Wednesday after they announced that their tariffs had been suspended: “No retaliation, you will be rewarded.”
The European Union said Thursday it would put trade retaliation measures on hold for 90 days, leaving room for negotiated solutions.
It all shows why much of Wall Street is preparing for more swings to hit the market as the S&P 500 was 20% below the record and approaching the “Bear Market.” In many cases, the whipping movements came not only daily, but also hours from time to time. The S&P 500 is still in the spot where Trump announced his sweeping tariff set last week on “Freeing Day.”
One encouraged signal came from the bond market where stress seemed to be alleviated.
The bond market has historically played the role of politicians and enforcers of economic policies that it is deemed rude. For example, it helped defeat the British Liz Truss in 2022. For example, 49 days marked her shortest Prime Minister in Britain. James Kerrville, an adviser to former US President Bill Clinton, said he is well known for hoping to be reborn as a bond market because of how powerful it is.
Earlier this week, Trump said on Wednesday he was seeing investors ‘feeling a bit sick’ as a big jump in yields from the US Treasury rattles the market.
A number of reasons could have been that they had suddenly risen sharply and suddenly, such as hedge funds, where they had to sell cash to foster US investments and investors to abandon US investments for a trade war. Regardless of the reasons behind it, Treasurys’ higher yields have increased pressure on the stock market and pushed higher rates for home loans and other loans for US households and businesses.
However, the Treasury yields for 10 years settled on the last day, following Trump’s U-turn on tariffs, returning to 4.30% soon after the release of a report that surpassed expectations regarding inflation in the US. That’s after shocking up to nearly 4.50% on Wednesday morning from just 4.01% at the end of last week.
However, as the morning progressed, the yield began to climb again, reaching 4.37%.
In overseas stock markets, the index came together across Europe and Asia with its first chance to trade following Trump’s suspension. Japan’s Nikkei 225 jumped 9.1%, Korea’s Cospi jumped 6.6%, and Germany’s Dachshund returned 4.5%.
AP writers Yuri Kageyama, Matt Ott and Huizhong Wu contributed.
Original issue: April 10th, 2025 8:25am EDT
