The markets tumbled, just one day after making historic gains following President Donald Trump’s announcement that he was pausing his sweeping tariff plan for 90 days.
At close on Thursday, the Dow dropped 1,014 points, or 2.5 percent, and the NASDAQ slid 737 points, or 4.3 percent, rallying slightly from midday when the Dow was down 1,687 points and the NASDAQ was down 957 points.
Thursday’s sharp drops come just one day after the stock markets surged after Trump unveiled a 90-day reprieve on his across-the-board tax — a move that prompted investors to reverse course after a rocky week. Seconds after his announcement, the markets soared; Wednesday marked the largest single-day point gains for both the Dow and the NASDAQ.
At a Cabinet meeting Thursday as the markets tanked, Trump didn’t rule out extending the pause beyond the 90 days: “We’ll have to see what happens.”
Thursday’s drops seemed to indicate that the market turbulence from Trump’s proposed tariffs is not yet over, noting that some levies are still in effect. The president Thursday raised China’s tariffs to 125 percent “effective immediately.” The White House clarified to CNBC that the total tariff rate on China will be 145 percent.
"You had the highest rise in stock market history yesterday. Of course there's gonna be a little pullback,” Peter Navarro, Trump’s trade adviser, said on CNN. “It’s just normal retracement after a big day. It's no big deal."
Treasury Secretary Scott Bessent said he expects after negotiating with other countries, “we will end up in a place of great certainty over the next 90 days.”
But uncertainty appears to be driving the market, analysts say.
“Delays help, but do not reduce uncertainty,” Michael Gapen, Morgan Stanley chief U.S. economist, told CNBC Thursday.
“Investors have sobered up,” Melissa Brown, SimCorp managing director of applied research. “Uncertainty is a big issue because the 145% rate could be a different number tomorrow. It’s very hard to call a bottom or a top because things have changed so much in the narrative and investor perceptions.”
"I still think this is more ‘sell the rip’ than ‘buy the dip’ [in stocks] — lots of problems continue but it is nice to see the President backing off and focusing on China," Renaissance Macro head of economics Neil Dutta told Yahoo Finance. "The issue is prolonged uncertainty."
On April 2, a day Trump has dubbed “Liberation Day,” he unveiled his sweeping tariff plan, claiming it would “help rebuild our economy and to prevent cheating.”
Just 13 hours after the import taxes took effect, the president took to Truth Social to announce a pause. “Based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” he wrote.
Trump told reporters later in the day that his Truth Social post “was written from the heart.”
In the wake of his announcement, European Commission President Ursula von der Leyen said hold off on the adoption of its countermeasures for 90 days. “We took note of the announcement by President Trump. We want to give negotiations a chance,” she wrote on X. “If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues. As I have said before, all options remain on the table.”
The president’s announcement came days after he and allies insisted the levies were here to stay.
Trump told reporters, before the tariffs took effect, that he wasn’t considering a pause: “We’re not looking at that.”
Commerce Secretary Howard Lutnick similarly said over the weekend: “There is no postponing. They are definitely going to stay in place for days and weeks.”
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