The American stock market experienced a sharp reversal Thursday, retreating from Wednesday’s remarkable surge.
Investor anxieties regarding the potential long-term ramifications of President Trump’s assertive trade policies have resurfaced after an initial wave of optimism triggered by his announcement of a 90-day suspension of tariffs for nations that haven’t imposed retaliatory measures. Despite this temporary reprieve, a 10% tariff remains in effect, and duties on goods from China have been elevated to 125%.
The market’s brief rally quickly dissipated, resulting in significant declines across major indices:
* S&P 500 futures plunged by 1.9%.
* Nasdaq 100 fell 2.4%.
* The Dow Jones Industrial Average slipped 1.3%, shedding approximately 500 points.
The yield on the 10-year Treasury note also decreased to around 4.3%, further illustrating the persistent market uncertainty.
Simultaneously, the U.S. dollar weakened as concerns mounted about the potential for Trump’s trade policies to undermine economic stability. The dollar depreciated against both the pound and the euro, with the pound reaching $1.296 and the euro climbing to $1.113. Currency markets remain on edge while investors evaluate the lasting impact of tariffs on worldwide economic growth.
As one analyst stated, “The market is waking up to the reality that the economic pain is already here. The pause might slow the bleeding, but it won’t undo the damage.”
The dollar index, which tracks the dollar’s performance relative to other major currencies, has dropped by more than one percent—a potential indicator of diminishing investor trust.
Deutsche Bank characterized the current downturn affecting stocks, bonds, and the U.S. dollar as a “simultaneous collapse in the price of all U.S. assets.” They described this climate as “uncharted territory,” highlighting that markets are no longer behaving predictably during times of economic stress. Ordinarily, periods of crisis prompt investors to seek refuge in U.S. dollars and Treasury bonds; however, both are currently declining in value—suggesting a potential erosion of confidence in the stability of American financial institutions.
Deutsche Bank analysts also proposed the possibility that the U.S. government might be deliberately encouraging the selloff in Treasury markets as a strategy to reduce asset valuations and address trade imbalances. “Reducing trade deficits effectively means reducing global demand for U.S. assets,” they observed.
Looking ahead, the bank cautioned that increasing tensions with China could escalate beyond trade disputes into a broader financial conflict, inflicting harm on both nations. “There is little room left for escalation on the trade front,” they warned, “There can be no winner to such a war.”
With investors navigating a turbulent market and an unpredictable policy landscape, attention remains focused on how central banks and global leaders will respond in the coming days—and whether more substantial relief will follow Wednesday’s temporary upswing.
