US Stock Market Drops as Uncertainty Lingers After Tariff Pause

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US Stock Market Drops as Uncertainty Lingers After Tariff Pause
Photo: Seth Wenig/AP/TT

Stock exchanges in the USA fell on Thursday after the joyous night the day before, triggered by President Donald Trump's announcement of a three-month tariff pause. The broad S&P500 index dropped 3.5 percent.

The technically heavy Nasdaq composite index fell even more, down 4.3 percent, while the Dow Jones industrial index sank 2.5 percent.

After approximately three hours of trading, the situation looked even worse. The Nasdaq had then fallen over 6 percent. Among the stocks that fell hard were giants like Tesla and Apple – the electric car manufacturer plummeted 7.3 percent and the iPhone manufacturer lost 4.2 percent.

The index declines came after Wednesday's giant surge in the wake of Trump partially backing down on his tariff plans against the rest of the world. Then, Wall Street's leading indices rose between 8 and 12 percent after having fallen the previous week.

Frida Bratt, economist at online broker Nordnet, explains Thursday's decline by saying that much remains uncertain about the way forward.

It's simply a reaction to the uncertainty persisting. Partly, it's just a pause, partly, negotiations will take place during that time, and we don't know where the tariff levels will ultimately land, she says.

Did investors overreact to the news of a tariff pause? Frida Bratt compares what happened to a rubber band that's been stretched for a longer period of time before being released:

Then it gets this speed upwards. I wouldn't say overreaction, but I thought even then that there was reason to try to keep a cool head.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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