In a sudden turn of events, US stocks took a nosedive, erasing earlier gains, after it became clear that President Trump was pressing ahead with his plan to impose hefty tariffs on Chinese imports. The S&P 500 ended the day 1.6% lower, quite a drop from the earlier high of a 4.1% increase. Meanwhile, the tech-heavy Nasdaq Composite also took a hit, sliding more than 2%.
The White House announced on Tuesday that additional tariffs of 50% on Chinese products were slated to kick in right after midnight on Wednesday, Washington time. These new tariffs are piled on top of those announced the previous week, pushing the total tariffs to exceed 104%.
Earlier in the day, there seemed to be a glimmer of hope as the administration hinted at being more open to negotiations with trading partners to lower their tariffs. However, as the day progressed, the signals became increasingly mixed.
On a more positive note, the US confirmed it would start negotiations with Japan, with Treasury Secretary Scott Bessent highlighting that Japan had prioritized entering talks swiftly.
Elsewhere in the markets, the US dollar edged down by 0.3% against a group of other currencies, and oil prices were also on the decline amid worries about a potential slowdown in global economic growth.
