U.S. stocks are nosediving, wiping out more than half of yesterday’s historic gains, as President Donald Trump’s trade war keeps investors on edge. The markets crash as the S&P 500 plunged 5% midday Thursday, reversing Wednesday’s 9.5% surge after Trump paused some tariffs.
Stocks in Freefall After Brief Rally
The Dow Jones Industrial Average cratered 1,701 points (4.2%) by noon, while the Nasdaq collapsed 5.7%. Just 24 hours earlier, markets had celebrated Trump’s tariff delay—but the optimism didn’t last.
“Trump blinks, but the damage isn’t all undone,” said UBS strategist Bhanu Baweja. Even if China tariffs drop to 50%, he warns, the economic hit could still slash corporate profits.
China Retaliation Rocks Hollywood Stocks
The selloff worsened after the White House confirmed Chinese imports now face 145% tariffs—higher than Trump’s initial 125% claim. “Everything is volatile because with Trump, you never know,” said Geo Securities CEO Francis Lun. “Recession fears are very real.”
China struck back by vowing to cut U.S. film imports. Warner Bros Discovery (maker of A Minecraft Movie) cratered 13.5%, while Disney dropped 7.6%. “American films will become less palatable due to U.S. aggression,” warned China’s film regulator.
Global Markets Whipsaw on Trade Whiplash
Europe paused its retaliation plans for 90 days, but the damage was done. The S&P 500 remains below pre-tariff levels, flirting with bear market territory after wild hourly swings.
Overseas markets initially rejoiced—Japan’s Nikkei soared 9.1%, South Korea’s Kospi jumped 6.6%, and Germany’s DAX gained 4.5%. But the relief proved short-lived as U.S. trading began.
Bond Market Panic Eases—Briefly
Earlier this week, spiking Treasury yields had rattled markets, with Trump admitting investors were “getting queasy.” The 10-year yield had skyrocketed from 4.01% to 4.50% in days—crushing stocks and pushing loan rates higher.
After Trump’s tariff pause, yields briefly cooled to 4.30%. But by midday, they climbed back to 4.37%, signaling lingering unease. As one Wall Street veteran noted: “The bond market rules everything—just ask Liz Truss.”
What’s Next? More Turbulence Ahead
With China mobilizing allies against U.S. trade policies and Trump’s next move unpredictable, analysts warn the rollercoaster isn’t over. “Markets hate uncertainty,” said Lun. “And right now, uncertainty is the only certainty we have.”
As mortgage rates creep higher and corporate earnings face pressure, one thing’s clear: this trade war’s fallout is far from finished. Buckle up—it’s going to be a bumpy ride.
