Washington - Saba:
US stocks has lost more than half of their historic gains recorded despite the easing of the trade war following President Donald Trump's announcement that he would suspend most of the new tariffs.
The Standard & Poor's 500 index fell 5% by noon on Thursday, losing more than half of its gains from the previous day, after the White House announced that tariffs on Chinese goods would increase to 145%.
The Dow Jones Industrial Average fell 1,701 points, or 4.2%, by 12:10 PM Eastern Time. The Nasdaq Composite Index fell 5.7%.
This comes as Bhanu Weja, an economic analyst at UBS, said in a report: "Trump appears to be turning a blind eye, but the damage has not been fully repaired." Wega said that Trump is focusing more on China, raising tariffs on its products to more than 145%.
Therefore, even if a negotiated reduction to about 50% is achieved, and even if the tariffs remain at only 10% for other countries, the damage to the US economy could be enough to dampen the expected growth in future profits for US companies.
US stocks accelerated their losses on Thursday after the White House clarified that Chinese imports would be subject to tariffs of 145%, not the 125% that Trump mentioned in his post on Truth Social on Wednesday, after the previous 20% fentanyl tariff was included.
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