U.S. stocks dropped 2% at the open, as investors sort through a global economic outlook that has improved drastically over 24 hours but remains uncertain.
Global markets soared overnight, catching up with yesterday’s epic tariff-pause rally in New York. But there was an undertone of skepticism: While the worst outcome may have been avoided, tariffs are still likely to weigh on growth and boost inflation. Betting markets still call a recession even money, for whatever that’s worth.
U.S. and U.K. bonds, which were at the center of a rout, rallied Thursday, while bonds in Germany and Japan declined. Wall Street parsed the latest consumer-price index, which showed inflation slowing more than expected, to a 2.4% annual rate. Prices for shorter-dated Treasurys rallied, pushing down yields, following the CPI data.
On Thursday, the European Union said it will suspend its first wave of retaliatory duties against the U.S. for 90 days to focus on negotiations after the Trump administration’s pause.
Trump’s reciprocal tariffs on nearly 100 nations took effect Wednesday. Later, as he paused the levies on other nations, Trump said he had raised China’s import tax to 125%.
In return, China said Thursday it would reduce imports of American movies, another bid to strike at U.S. services exports in an escalating trade war between the two countries.
Goldman Sachs cut its growth outlook for China, citing the impact of tariffs. The bank now projects China’s economy will expand 4% this year and 3.5% in 2026.
In recent trading:
U.S. stocks fell, with the major indexes down between 1% and 2.6%.
Gold prices rose, up 1.9% a day after their largest gain in five years.
Government bonds were mixed, with investors awaiting a $22 billion sale of 30-year U.S. Treasurys on Thursday.
The dollar extended its decline, down just under 1%.
Stocks jumped overseas, with the Nikkei rising 9% and European stocks up around 5%.
📹 Watch WSJ’s Gunjan Banerji answer your questions about the market’s wild swings:
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
