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Market Commentary - Foreign Markets

US stocks dropped sharply as tariff tensions resurfaced, inflation data showed mixed signals and sectors like oil, airlines and semiconductors slumped.

Wall Street Tumbles Amid Tariff Worries and Weak Sector Performance

11-Apr-2025, 10:03
The Nasdaq plunged 737.66 points (4.3%) to 16,387.31, the S&P 500 tumbled 188.85 points (3.5%) to 5,268.05 and the Dow slumped 1,014.79 points (2.5%) to 39,593.66.

Wall Street saw a sharp pullback as traders cashed in on gains from Wednesday's spike following President Trump's announcement of a 90-day pause on new reciprocal tariffs. However, concerns lingered as China was excluded from the pause and tariffs on its goods were hiked to 125%. The uncertainty surrounding future trade developments added to market apprehension. Russ Mould of AJ Bell noted that while the pause is positive in the short term, the lack of long-term clarity may pose challenges ahead.

Labor Department released a report which showed a slight decrease by U.S. consumer prices in March, potentially viewing the data as old news. The report said the consumer price index edged down by 0.1% in March after rising by 0.2% in February. Excluding food and energy prices, the core consumer price index crept up by 0.1 in March after rising by 0.2% in February. The report also said the annual rate of consumer price growth slowed to 2.4% in March from 2.8% in February. The annual rate of core consumer price growth also fell to 2.8% in March from 3.1% in February. It also released another report which showed first-time claims for U.S. unemployment benefits crept slightly higher in the week ended April 5th.

Oil service stocks pulled back sharply along with the price of crude oil, dragging the Philadelphia Oil Service Index down by 8.9%. Airline stocks significant moved downwards, resulting in an 8.4% nosedive by the NYSE Arca Airline Index. Semiconductor stocks substantially weakened, as reflected by the 8% plunge by the Philadelphia Semiconductor Index. Oil producer, computer hardware, banking and biotechnology were all considerably weak while gold stocks bucked the downtrend amid an extended rebound by the price of the precious metal.

Asia-Pacific stocks moved sharply higher. Japan's Nikkei 225 Index skyrocketed by 9.1%, South Korea's Kospi shot up by 6.6% and China's Shanghai Composite Index jumped by 1.2%. The major European markets also showed substantial moves back to the upside on the day. The German DAX also soared by 4.5%, the French CAC 40 Index shot up by 3.8% and the U.K.'s FTSE 100 Index surged by 3%.

In the bond market, treasuries regained ground early in the day but pulled back near the unchanged line over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down less than a basis point to 4.39%.