A trader works on the floor of the New York Stock Exchange in New York, the United States, on April 8, 2025. (Photo by Michael Nagle/Xinhua)
NEW YORK, April 8 (Xinhua) -- U.S. stocks closed sharply lower on Tuesday, after the White House confirmed plans to move forward with a dramatic increase in tariffs on Chinese goods.
The Dow Jones Industrial Average dropped 320.01 points, or 0.84 percent, to close at 37,645.59. The S&P 500 fell 79.48 points, or 1.57 percent, to 4,982.77, narrowly avoiding a bear market. The tech-heavy Nasdaq Composite plunged 335.35 points, or 2.15 percent, to 15,267.91.
All 11 major sectors of the S&P 500 ended in the red. Materials and consumer discretionary led the losses, down 2.96 percent and 2.54 percent, respectively. Financials saw the smallest decline, easing 0.41 percent.
Markets jumped higher in the opening of the session, with some traders citing oversold conditions and optimism over possible tariff negotiations with key trading partners. Sentiment got a brief boost after U.S. President Trump posted on Truth Social about a "great call" with the acting president of South Korea, and Treasury Secretary Scott Bessent told CNBC that about 70 countries had approached the United States seeking tariff talks.
However, the rally quickly faded after the White House confirmed it would move forward with a proposed additional 50 percent tariff hike on Chinese goods, a move that significantly escalated the trade standoff and rattled investor confidence. The proposed action would raise the overall tariff rate on imports from China to 104 percent, reigniting investor concerns over trade tensions and economic fallout.
Volatility surged after the news, with the Cboe Volatility Index (VIX), Wall Street's fear gauge, jumping more than 14 percent to 53.76 by late afternoon, according to FactSet data.
Tech stocks took a heavy hit, with Apple leading the market downturn. Apple shares, which had climbed more than 4 percent earlier in the day, reversed course and closed down 4.5 percent. The stock has now tumbled around 22 percent over the past four sessions, marking its worst four-day performance since 2008.
In the bond market, yields on U.S. government debt moved higher as investors sold off longer-duration Treasuries. The 10-year and 30-year yields jumped 9.6 and 12.3 basis points, respectively, to roughly 4.26 percent and 4.71 percent, as of 3 p.m. EST. Over the past two sessions, both yields posted their steepest two-day gains since early 2023 and March 2020, respectively.
"The bond market's been telling us it hasn't been panicking. It's been telling us that maybe we're not in a recession yet, and we may not go into one," Nancy Tengler, chief investment officer at Laffer Tengler Investments said on Tuesday.
