The U.S. stock market opened significantly lower after a remarkable rally that saw the Dow Jones Industrial Average climb 3,000 points and the S&P 500 increase by 12%, driven by news of a 90-day tariff suspension.
On Thursday, the S&P 500 began trading 2% down, while the Dow Jones Industrial Average dropped 715 points, or -1.76%, influenced by futures that indicated a slight retreat. This negative start mirrored investor sentiment as the market processed the changing tariff landscape, with concerns about the U.S.–China trade tensions and their potential economic effects overshadowing premarket activity.
Despite the U.S. indexes experiencing a historic rally, the S&P 500 futures fell 2.07%. Dow futures declined by 636 points, approximately -1.56%, and futures connected to the technology-focused Nasdaq 100 plummeted 2.54%.
Upon opening, the Nasdaq extended its losses to 3%, with shares of Apple and Tesla falling over 3% and 5%, respectively. Nvidia saw a notable decrease, falling 4.9% at the open, while Meta Platforms dropped by 3.7%.
The sharp declines across major indexes followed significant rallies on April 9. However, experts—including economist Mohamed El-Erian—advise caution.
Before the market opened, the U.S. Bureau of Labor Statistics published the Consumer Price Index report for March. It indicated that inflation cooled down to 2.4%, decreasing by 0.1% on a seasonally adjusted basis. This is a reduction from February’s 2.8%, marking the slowest month-over-month core inflation growth since March 2021.
Although the March CPI report points to a significant decline in U.S. inflation pressures month-over-month, concerns about tariffs linger. The inflation data was released just one day after President Trump announced a substantial boost for markets with the 90-day pause on reciprocal tariffs.
The markets reacted positively to the pause; however, analysts highlighted that the imposing 125% tariffs on Chinese imports remain a pressing concern. While the White House is open to negotiations during the 90-day period, uncertainty surrounding China’s response is affecting investor sentiment.