US close: Stocks hand back some of previous session's historic gains

dl nyse new york stock exchange new york city nyc wall street wall st nasdaq markets trading finance unsplash — Sharecast / David Vives via Unsplash

Major indices closed sharply lower on Thursday as the previous session's impressive rally seemingly ran out of steam.

At the close, the Dow Jones Industrial Average was down 2.50% at 39,593.66, while the S&P 500 lost 3.46% to 5,268.05 and the Nasdaq Composite saw out the session 4.31% weaker at 16,387.31.

The Dow closed 1,014.79 points lower on Thursday, giving back much of Wednesday's whopping 2,962.86 point gain that came as Donald Trump announced a 90-day pause on his so-called "reciprocal" tariffs.

Thursday's losses come hot on the heels of yesterday's surge, with the Dow Jones delivering its biggest percentage increase since March 2020 and the S&P 500 turning in its third-largest single-day gain since World War II.

When asked why he chose to pause the tariffs, Trump said he thought people were "jumping a little bit out of line" and had gotten" a little bit yippy, a little bit afraid". Trump also said he was not ruling out the possibility of an extension to the pause, stating, "we'll have to see what happens at that time".

While the president did choose to halt his tariffs until July, Trump also moved to up the tariff rate on Chinese-made goods from 104% to 125% to 145%, effective immediately, but stated Beijing and Washington were close to making a "very good deal".

On the macro front, the cost of living in the US came in under economists' forecasts in March, with inflation dragged down by a slump in energy quotes. According to the Department of Labor, in seasonally adjusted terms, the Consumer Price Index dipped by 0.1% month-on-month, missing consensus estimates for a drop of 0.2% and serving to push the year-on-year rate of advance in headline CPI down to 2.4%. Consensus had been that inflation would slow from 2.8% to 2.6%.

Energy prices dropped by 2.4% over the month, helping to offset a 0.4% rise in food prices by a big margin. Core CPI, which excludes food and energy prices, on account of their volatility, also undershot forecasts, with underlying Core CPI prices edging up 0.1% month-on-month and 2.8% year-on-year, missing estimates of a 0.3% and 3.0% increase, respectively.

Elsewhere, Americans lined up for unemployment benefits at an accelerated pace in the week ended 5 April, according to the Labor Department. Initial jobless claims rose by 4,000 to 223,000 last week, in line with market expectations, while continuing claims fell by 43,000 from the previous week's downwardly revised level to 1.85m, well below expectations of 1.88m. The four-week moving average, which aims to smooth out week-to-week volatility, was unchanged from the previous week's unrevised 223,000 print.

In the corporate space, companies with significant exposure to China traded lower on Thursday, with Tesla and Apple shedding 7.3% and 4.2%, respectively.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Intel Corp. (INTC)$19.889.23%
Apple Inc. (AAPL)$190.429.10%
Microsoft Corp. (MSFT)$381.356.94%
Cisco Systems Inc. (CSCO)$56.596.19%
Amgen Inc. (AMGN)$281.412.93%
Unitedhealth Group Inc. (UNH)$594.402.75%
Walgreens Boots Alliance, Inc. (WBA)$10.691.91%
Coca-Cola Co. (KO)$70.791.16%
Walmart Inc. (WMT)$90.611.13%
McDonald's Corp. (MCD)$306.490.93%