The Donald Trump administration confirmed its policy to implement mutual tariffs starting on the 9th, leading to a decline in the New York stock market, which closed lower on the 8th (local time).
The New York stock market, which had created a roller-coaster atmosphere the previous day with rumors of a 'tariff moratorium,' displayed extreme volatility again that day amid mixed expectations and disappointments regarding changes in tariff policy.
The Dow Jones Industrial Average closed down 320.01 points (−0.84%) at 30,645.59, while the Standard and Poor's (S&P) 500 index finished trading down 79.48 points (−1.57%) at 4,982.77. The technology-heavy Nasdaq index recorded a drop of 335.35 points (−2.15%) at 15,267.91.
It is the first time since April 2024 that the S&P 500 index has fallen below the 5,000 mark. Both the Dow and S&P 500 indices continued their decline for four consecutive transactions as of that day.
In particular, the S&P 500 has dropped 19% from the peak recorded in February, nearing bear market territory. On Wall Street, a decline of more than 20% from the peak is typically viewed as entering a bear market.
Early in the session, the New York stock market started to rebound as expectations grew that tariffs could be eased through individual negotiations, with the Nasdaq index rising nearly 4.6% at one point during the session.
Scott Bechtel, U.S. Treasury Secretary, noted in an interview with CNBC, "About 70 countries have requested tariff negotiations," and added, "If they come to the table with solid proposals, we could secure a good transaction," stimulating market expectations.
China heightened trade war tensions by stating before the opening, "If the U.S. insists on its position, we will stand firm against it," but the market did not respond significantly.
However, in the afternoon, White House Spokesperson Caroline Levitt announced, "A total tariff of 104% targeting China will take effect from 12:01 a.m. on the 9th," rapidly cooling expectations for tariff relief. Subsequently, the three major indices gave up all of their intraday gains and expanded their declines, ultimately closing lower.
Large technology stocks that had started strong that day also mostly reversed course and fell. Apple (−4.79%) and Tesla (−5.02%) saw significant drops, while Nvidia (−1.37%), Amazon (−2.41%), Meta Platforms (−1.07%), Alphabet (−1.41%), and Microsoft (−0.76%) all declined in value among the 'Magnificent 7' stocks.
Melissa Brown, managing director of investment decision research at Simkorp, stated, "Investors hoped to be optimistic, but ultimately realized there was no reason to be," and predicted that corporations would mention tariffs frequently during the upcoming first-quarter earnings announcement season.