4:12pm: Tariff relief rally gives way
US stocks tumbled Thursday, sharply reversing the previous session’s historic rally as investors reassessed the economic outlook following President Donald Trump’s temporary suspension of reciprocal tariffs.
The Dow Jones fell 1,015 points, or 2.5%, to close at 39,594, the S&P 500 dropped 189 points, or 3.5%, to finish at 5,268, and the Nasdaq shed 738 points, or 4.3%, settling at 16,387.
The small-cap Russell 2000 also declined sharply, dropping 89 points, or 4.6%, to close at 1,825, reflecting broad-based market weakness.
Analysts attributed the sharp pullback to renewed concerns over trade policy, global growth, and speculative profit-taking, highlighting the market's ongoing volatility and fragile sentiment.
3:31pm: Global IPO market shows resilience
Global initial public offering (IPO) activity showed signs of resilience in the first quarter of 2025 driven by momentum in the United States.
Despite heightened uncertainty driven by geopolitical shifts, trade tensions, and volatile markets, 291 IPOs globally raised US$29.3 billion, marking a 20% year-over-year increase in total deal value, the report showed.
The US posted its third-strongest first quarter for IPOs in history, with 59 listings supported by constructive market conditions early in the quarter and continued demand from international issuers.
In other regions, Asia-Pacific led in IPO volume and value, with Japan contributing the largest global IPO in Q1. There was growth in Hong Kong, South Korea, and Malaysia. However, China and Oceania remained subdued.
In EMEIA, European markets faced uncertainty from global policy changes, while the Middle East performed well, and India recorded high deal value despite lower volume.
2:53pm: Trump says 'I haven't seen it' when asked about market drop
A day after celebrating a historic stock market rally, President Donald Trump said he wasn’t keeping an eye on Wall Street as stocks tumbled in response to rising trade tensions with China.
“I haven't seen it,” Trump told reporters, explaining he had been in a meeting for two-and-a-half hours.
He then turned the question over to Treasury Secretary Scott Bessent, who downplayed the market reaction.
“Up two [and] down one isn't a bad ratio, and we're up 10 [percent], down 5,” Bessent said. “As we have talked about, as we go through the queue and settle with these countries who are going to bring us their best offers, we will end up in a place of great certainty over the next 90 days on tariffs.”
1:55pm: Keep perspective
Markets were rattled by the tariff announcement, but Kristian Kerr, Head of Macro Strategy at LPL Research, acknowledges the sell-off as unsettling but not without precedent, citing that similar "waterfall declines" have occurred at least 14 times in the past century.
“Market shocks tend to trigger aggressive risk repricing, and last week’s tariff announcement was a prime example," Kerr wrote.
While initial reactions were relatively rational, he noted that by Friday, “emotional selling had firmly taken over,” evidenced by the highest-volume trading session in US stock market history.
Despite the turmoil, Kerr stresses that the situation is not akin to the COVID-19 crisis. “Some public companies in the shipping industry... saw valuations plunge to levels that would only make sense if the global economy was indeed grinding to a screeching halt — again, something that simply isn’t happening.”
Looking ahead, Kerr sees opportunity amid the volatility: “When valuations overshoot to irrational extremes, opportunities emerge for investors willing to think long-term.” He adds that while uncertainty remains high, “moments of excessive fear often set the stage for future returns.”
The message for disciplined investors: keep perspective. “Markets, by their nature, eventually stabilize, and those who are able to look past the short-term chaos should be well rewarded in the longer term.”
1:11pm: White House: China faces 145% tariffs
The White House confirmed that the total tariff on China has risen to 145%, higher than the 125% initially indicated by Trump.
This includes a new 125% "reciprocal" tariff rate and a 20% fentanyl tariff.
The unexpected news sent stocks to session lows, reflecting ongoing market uncertainty about Trump's fiscal policies despite the temporary 90-day tariff pause announced on Wednesday.
12:34pm: Two-sided risks
Bank of America analysts are offering cautious optimism on core PCE inflation, which they believe will print at 0.1% month-over-month, with an initial range of 0.10-0.13%.
However, they emphasized that the outcome will largely depend on Producer Price Index (PPI) components, particularly airfares and financial services.
"Risks are two-sided," the analysts wrote. "Either way, PCE inflation should decelerate from Jan and Feb rates, which increases our conviction that the first two months were subject to some noise."
The analysts also noted a market reaction to a weaker-than-expected Consumer Price Index (CPI) report, with the Treasury curve bull steepening and the market pricing in more interest rate cuts.
Despite the positive March data, the analysts caution that inflation risks remain tilted to the upside, largely due to higher tariff rates, and expect inflation to rise again over the year, keeping the Fed on hold.
11:37am: Markets react
Markets are now reacting to the latest inflation report, which showed a surprising 0.1% decline in CPI.
Just before midday, the Dow Jones Industrial Average dropped by 3.1%, the S&P 500 fell 3.8%, and the Nasdaq Composite saw a 4.5% decline, as investors digest the mixed signals on inflation and broader economic uncertainties.
11:12am: Muted inflation reaction
Despite inflation coming in lower than expected, the market's muted reaction is surprising, according to Nic Puckrin, crypto analyst and founder of The Coin Bureau.
Puckrin suggests that factors such as ongoing concerns about tariffs and a potential recession may be dampening any rally. He noted that the current inflation data doesn't account for recent tariff issues, and any setback could send markets into correction territory.
That said, March's inflation data increases the likelihood of a June rate cut, Puckrin believes.
"(I)ndeed, the markets are now projecting at least three cuts this year. In fact, central banks across the globe are quietly beginning to dust off their money printers.
"The Fed is phasing out its quantitative tightening (QT) policies, China’s central bank is injecting hundreds of billions of yuan into the financial system already, and the ECB, Bank of Japan and Bank of England are all widely expected to cut rates further.”
10:30am: Falling CPI offers Fed breathing room
March’s US Consumer Price Index (CPI) data showed a surprising decline, offering the Federal Reserve some relief as it navigates the delicate balance between inflation and economic growth.
The headline CPI dropped by 0.1% last month, the largest monthly drop since May 2020, primarily driven by a sharp 6.3% decrease in gasoline prices.
The drop in prices gave Fed officials a momentary reprieve as they continue to evaluate their monetary policy stance amid persistent economic uncertainties.
The CPI data was unexpectedly soft in March, which gives the FOMC “a bit of breathing room,” according to analysts at Wells Fargo.
Even when excluding volatile food and energy prices, core CPI rose a modest 0.1%, marking the smallest increase since January 2021.
“Big declines in some of the more volatile travel-related components contributed to the slowdown,” Wells Fargo noted, highlighting deflation in airfares, lodging away from home, and used autos.
Read more here.
9.49am: Nasdaq leads plunge as some of reprieve rally gains returned
More volatility as US stocks have plunged at the open, with the Dow Jones losing over 900 points at the start, though this has eased off.
The Dow has dropped or 1.9%, while the S&P 500 has slumped back 2.1% and the Nasdaq has so far given back 2.7% of yesterday's rally.
As a reminder, the trio leapt 8%, 9.5% and 12% respectively yesterday after Trump accepted a 90-day tariff retrieve.
Big fallers include Nvidia with a 4.5% tumble, Tesla 4.1%, Intel 4%, Apple 3.4%, Palantir and Ford down over 3%.
One really big trend of the past few days is... US outperformance. The gap that opened up between international stocks and US markets by mid-march has shrunk quite a lot. European, Japanese and Hong Kong stocks now beating the S&P by 7-12 points, down from 11-28 points at peak. pic.twitter.com/C6STqgWeKL
— Mike Bird (@Birdyword) April 10, 2025
8.40am:
US inflation eased more than expected last month.
The consumer price index for March was up 2.4% on the year earlier, compared to inflation of 2.8% in February, lower than the expected 2.5%.
On a monthly basis, US CPI was up 0.1%, softer than the 0.2% rise the month before and the 0.3% expected.
The dollar has fallen following this, with the pound up 1% to $1.2942 and the euro rising 1.6% to $1.1117.
7.45am: Nasdaq and S&P to give back some gains
A portion of the previous day's huge tariff reprieve rally on Wall Street is predicted to be trimmed on Thursday, with trade tensions between the US and China continuing to rumble.
Dow Jones futures were pointing to a loss of around 460 points or 1.15%, while S&P 500 futures were showing a 1.6% deficit and those for the Nasdaq indicated a 1.95% drop.
Yesterday, after Donald Trump announced a 90-day pause on his 'reciprocal' tariffs for countries other than China, a sharp relief rally was triggered, with the Dow up 8%, the S&P surging 9.5% and the Nasdaq rocketing 12%.
This was led by double-digit percent gains from the tech giants, including Apple, Nvidia and Tesla, which led to the S&P gaining an incredible $4 trillion in market cap terms in its best day since October 2008.
While President Trump said the 90-days pause was for non-retaliating countries, which will instead face the blanket tariff rate of 10%, with the exception of China, which he said would instead now face a higher 125% tariff, up from 104% the previous day.
That was a response to China announcing earlier a higher 84% tariff on US goods, which comes into effect today.
Trump suggested the decision to delay tariffs had been made yesterday morning as people had been "a little bit afraid" and that "the bond market is very tricky" with people "getting a little queasy".
Macro strategist Peter Sidorov at Deutsche Bank noted that the Wall Street rally overnight still left the S&P down 3.8% from its level prior to the reciprocal tariff announcements on April 2.
"And other assets have seen less of a recovery, with 10yr Treasury yields +20bps higher and US HY credit spreads +92bps wider," he said.
"So while there has been understandable relief as evidence of a Trump put reemerged following the extreme market conditions that we highlighted yesterday morning, the genie is still out of the bottle on policy unpredictability."
A 10% minimum universal tariff still represents the largest tariff increase in decades, he added, with heightened trade uncertainty expected to linger.
"Perhaps most crucially, we are currently still on course for a disorderly economic decoupling between the world’s two largest economies, with no immediate signs of either US or China backing down."
Meanwhile, commodities markets have seen a divergence between gold and oil today, with WTI crude having popped from a new four-year low below $56 a barrel up to $62.5 yesterday but today giving way to a 3% fall to $60.4.
"Despite the avoidance of heightened tariffs against some of the hardest hit countries, global demand concerns remain hugely prevalent as China and the US break trade ties," said market analyst Josh Mahony at Scope Markets.
"Demand for crude looks to be an ongoing issue, and the joint push for higher production in OPEC and the US provides the basis for ongoing consternation in the energy space."
Meanwhile, gold has leapt back up to $3,120, only just over 1% away from the all-time dollar highs of early this month.
The dollar index is down 0.9% to below 102, around its lowest level since October.