Stocks resumed their sharp pullback on Thursday, as the latest concessions from the White House on President Donald Trump’s controversial tariff policies failed to restore investor confidence.
The Dow Jones Industrial Average fell 427.51 points, or 0.99%, to close at 42,579.08, after dropping more than 600 points at session lows. The S&P 500 tumbled 1.78%, finishing at 5,738.52, while the Nasdaq Composite plunged 2.61%, settling at 18,069.26, officially entering correction territory—defined as a 10% drop from a recent high.
Thursday’s sell-off followed the implementation of U.S. tariffs on Canadian, Mexican, and Chinese imports earlier this week, which triggered retaliatory measures from Canada and China. Mexico announced it would unveil its own response over the weekend. The Nasdaq is down more than 4% for the week, with the Dow and S&P 500 losing 2.9% and 3.6%, respectively. All three indexes are on track for their worst week since September 2024.
The market had initially seen a brief recovery on Wednesday following the White House’s announcement of a one-month delay on tariffs for automakers under the United States-Mexico-Canada Agreement (USMCA). Investors had hoped this would lead to further tariff rollbacks, easing the expected economic blow. However, Thursday’s announcement of an extension for additional Canadian and Mexican goods did little to fuel a sustained rally.
Uncertainty around the long-term direction of U.S. trade policy remained high, further dampening investor sentiment. Treasury Secretary Scott Bessent’s comments in favor of tariffs on Thursday deepened concerns, as he argued that the U.S. would respond if other countries’ practices harm the American economy. He also criticized Canadian Prime Minister Justin Trudeau, calling him a “numbskull” and emphasizing that the administration was prioritizing Main Street over Wall Street.
Keith Lerner, chief market strategist at Truist, summed up the mood, saying, “You’re just having confusion… that confusion is permeating into the day-to-day swings of the market.”
Further dragging down stocks was the unwinding of the artificial intelligence (AI) trade that has powered markets for over a year. Chipmaker Marvell Technology saw a nearly 20% drop after issuing mixed first-quarter guidance. Other semiconductor companies, including ON Semiconductor, Taiwan Semiconductor, and Nvidia, also experienced losses.
Compounding investor anxiety were recent economic reports suggesting that Trump’s tariff policies could harm the U.S. economy. The Federal Reserve’s Beige Book and the Institute for Supply Management’s manufacturing data raised concerns about rising input costs due to tariffs. Additionally, data from Challenger, Gray & Christmas revealed that layoff announcements surged to their highest level since 2020, largely attributed to Trump’s policies and efforts by figures like Elon Musk to reduce the federal workforce.
As the market braces for Friday’s highly anticipated jobs report, uncertainty continues to dominate investor sentiment, leaving stocks vulnerable to further declines.
