U.S. Stocks Plunge Amid Trade Tensions, Nasdaq Drops 4.3%

U.S. stocks experienced a significant decline, with the Nasdaq Composite tumbling by 4.3%. The S&P 500 also dropped by over 3.6%, reflecting a broader market selloff. This downturn came after a period of volatility, where the Dow Jones Industrial Average had surged by nearly 8% on Wednesday, only to retreat by 2.3% in mid-morning trading the following day. The Dow Jones Industrial Average fell by 1,049.40 points, or 2.58%, to close at 39,559.05. The S&P 500 declined by 171.37 points, or 3.14%, to 5,285.43. The Nasdaq Composite also saw a substantial drop, falling by 648.54 points.

The market's volatility was driven by uncertainty surrounding the global economic outlook, despite a temporary improvement in sentiment following the announcement of a 90-day pause on "reciprocal tariffs." This pause had initially boosted market confidence, with the Dow skyrocketing by 2,963 points, or 7.87%, the S&P 500 shooting up by 9.52%, and the Nasdaq soaring by 12.16%. However, the euphoria was short-lived as investors reassessed the economic landscape and the potential impact of ongoing trade tensions.

The selloff resumed as the White House doubled down on its tariff policies, with the Dow falling by 320 points, or 0.84%, the S&P 500 declining by 1.57%, and the Nasdaq Composite sliding by 2.15%. This reversal marked a significant shift from the earlier rally, highlighting the market's sensitivity to geopolitical developments. The broader S&P 500 fell 1.5%, putting the index on the brink of a bear market, a term that indicates a 20% drop from a previous peak. The move lower on Tuesday resumed a selloff that stretches back to the tariff announcement last week. Since then, the S&P 500 and Nasdaq have each fallen more than 12%.

Analysts have attributed the market's volatility to the ongoing trade tensions and the uncertainty they bring to the global economic outlook. The pause on tariffs had provided a brief respite, but the resumption of tariff policies has reignited concerns about the potential impact on global trade and economic growth. Investors are closely monitoring the situation, with many adopting a cautious approach as they navigate the uncertain market conditions.