US stocks and the dollar fell sharply on Thursday, giving back some of their huge gains in the previous session, as traders continued to fixate on Donald Trump’s tariffs and their potential hit to global growth.
Wall Street’s blue-chip S&P 500 index, which on Wednesday soared 9.5 per cent in its best session since 2008, closed down 3.5 per cent in late afternoon trading. It has fallen more than 6 per cent this month.
The tech-heavy Nasdaq Composite — which on Wednesday surged more than 12 per cent for its best day since 2001 — lost 4.3 per cent on Thursday.
The US dollar, typically a safe haven investment in moments of market volatility, also fell. The dollar index, which weighs the greenback against a basket of six currencies, fell 1.72 per cent.
The decline came as banks warned that the continued tariffs on China and the prospect of more to come following the 90 day period, could still tip the US into a recession.
In a note on Thursday, Goldman Sachs said it was “too early for the ‘all clear” and warned that while some risks had been reduced, uncertainty remained “very high.”
Uncertainty over Trump’s trade policies and objectives is likely to “beset markets and macroeconomic outlooks in the months and quarters ahead”, said Bill Campbell, global bond portfolio manager at DoubleLine.
European stocks retreated from early gains, with the Stoxx Europe 600 index closed up 3.7 per cent. The UK’s FTSE 100 gained 3 per cent after rising 6.3 per cent earlier.
