U.S. markets were hit hard on Thursday as new shifts in trade policy sent stocks tumbling. Technology shares led the declines, the dollar weakened, and recession fears continued to weigh heavily on financial stocks.
Investor sentiment was rattled by the unpredictable swings in U.S. tariff policy, particularly regarding goods from Mexico and Canada. On Thursday, the White House announced a temporary pause on tariffs for items that comply with the North American Free Trade Agreement (NAFTA), extending the reprieve until April 2. This move came just days after the U.S. imposed 25% tariffs on its two largest trading partners.
Commerce Secretary Howard Lutnick suggested that the one-month tariff pause could extend beyond the auto industry. Shortly after, President Trump indicated that some tariffs on Mexico would be scaled back.
The drama escalated further when Treasury Secretary Scott Bessent called Canadian Prime Minister Justin Trudeau a “numbskull,” warning that Canada’s tough stance could lead to even higher tariffs on imports. Trudeau, for his part, stated that Canadian officials are engaged in talks with U.S. counterparts to ease the tariff impact on some sectors.
The turbulence sent major indexes into the red. The tech-heavy Nasdaq Composite slid 2.61%, closing in correction territory—more than 10% off its previous high. The Dow Jones Industrial Average dropped by around 430 points, or roughly 1%.
Overseas, the European Central Bank took action, cutting interest rates as the eurozone contended with the looming threat of tariffs and the possibility of increased military spending.
