US Stocks Drop Day After Trump Tariff Pause Announcement

A day earlier, all three indexes posted significant gains, with the Dow Jones increasing by nearly 3,000 points.

Traders work on the floor of the New York Stock Exchange (NYSE) during afternoon trading in New York on April 9, 2025. Angela Weiss/AFP via Getty Images

Wall Street opened sharply lower on Thursday morning, coming a day after President Donald Trump’s announcement that he would pause reciprocal tariffs for every country except China.

As the markets opened at 9:30 a.m., the Dow Jones Industrial Average was down by roughly 700 points, or more than 2 percent, while the Nasdaq composite shed more than 400 points, or roughly 2 percent. The S&P 500, which had posted its largest single-day gain since 2008 after Trump’s announcement, dropped by more than 2 percentage points.

In the global markets, Germany’s DAX initially gained more than 8 percent and was up by 5.3 percent later on, while France’s CAC 40 in Paris gained 5 percent and Britain’s FTSE 100 surged by 4 percent. Japan’s benchmark jumped by more than 9 percent as investors welcomed Trump’s decision to put his latest tariff hikes on hold for 90 days.

On Wednesday, all three indexes posted significant gains, with the Dow Jones increasing by nearly 3,000 points and the Nasdaq shooting up by 1,800 points. Those gains immediately followed Trump’s announcement to pause the duties.

The White House later confirmed that the pause only impacts rates higher than the 10 percent baseline tariff that he announced last week. The baseline tariff is still in effect, officials said.

China would face higher rates because of the “lack of respect that China has shown to the World’s Markets,” Trump wrote on his Truth Social platform. Chinese imports into the United States will now face a 125 percent tariff, “effective immediately,” he said.

“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” he added.

The European Union’s executive commission said on Thursday it will put its retaliatory measures against new U.S. tariffs on hold for 90 days to match Trump’s pause on his sweeping new tariffs and leave room for a negotiated solution.

European Commission President Ursula von der Leyen wrote in a post on social media platform X that the commission, which handles trade for the 27 member countries, “took note of the announcement by President Trump.”

She warned, however, that “if negotiations are not satisfactory, our countermeasures will kick in,” referring to tariffs that the bloc approved.

“Preparatory work on further countermeasures continues,” von der Leyen said. “As I have said before, all options remain on the table.”

Also on Thursday, David Bisbee, the interim head of the U.S. mission to the World Trade Organization (WTO), said the United States was “taking action it considers necessary for the protection of its essential security interests,” which is a move he said was allowed under the trade body’s rules.

Bisbee told a WTO gathering that Trump had taken steps to address an “emergency” caused by persistent annual U.S. goods trade deficits, which the envoy said topped $1 trillion in each of the past two years.

Treasury Secretary Scott Bessent told reporters on Wednesday that the tariffs announced a week ago were designed to get countries to come to the negotiating table with the White House on trade.

“I think the market now understands everything they saw last Wednesday was a ceiling, and now we have a temporary floor,” he said, adding that “we saw the successful negotiating strategy that President Trump implemented a week ago today” that “brought more than 75 countries forward to negotiate.”

The Associated Press contributed to this report.