The markets are reeling once again — less than 24 hours after the S&P 500 had its best single-day rally since 2008 as investors cheered President Trump’s 90-day tariff delay.
The White House confirmed on Thursday morning that the total tariffs on China will now be 145% when accounting for the previous 20% duties already in place. The news came as a surprise to the market, as President Trump had posted on Truth Social on Wednesday that the tariff rate charged to China would be 125%.
Read more: What Trump’s tariffs mean for the economy and your wallet
Stocks hit their lows of the session on the news. The S&P 500 (GSPC) dropped as much as 6%, while the tech-heavy Nasdaq Composite (IXIC) shed roughly 7%. The Dow Jones Industrial Average (^DJI) fell over 2,100 points, or more than 5%. All three major averages recovered some losses in afternoon trading.
^GSPC ^DJI ^IXIC
The reversal in markets reflects how many Wall Street strategists and economists are talking about the current state of play. On Wednesday, Trump removed the worst-case scenario for investors worried about tariffs slowing economic growth. But that move could just be temporary. It’s only a “90-day pause.”
And as Thursday’s quick shift in the tariff rate reminds investors, all that uncertainty around Trump’s fiscal policy isn’t going anywhere.
“I still think this is more ‘sell the rip’ than ‘buy the dip’ [in stocks] — lots of problems continue but it is nice to see the President backing off and focusing on China,” Renaissance Macro head of economics Neil Dutta wrote in a note during Wednesday’s rally. “The issue is prolonged uncertainty.”
Economists like Dutta are still discussing the US entering recession later this year. Economic growth data has slowed to start 2025, and the fear of businesses investing less as they wait to hear more information on tariffs still remains, casting a shadow over the outlook for stocks.
“Overall, we’re kind of still where we were,” Brent Schutte, Northwestern Mutual Wealth Management Company’s chief investment officer, told Yahoo Finance on Thursday. “Certainly, some of the tension has come off the boil, but there’s still a lot of uncertainty out there. And to me, uncertainty means that people are more indecisive, CEOs and consumers alike. And that is the risk going forward in the next 90 days.”
This means the outlook for publicly traded companies is likely still murky. Strategists don’t believe the upcoming round of first quarter financial reports, which begins with large banks like JPMorgan (JPM) on Friday, will change that picture much.
