US stock markets witnessed a dramatic reversal on Tuesday, wiping out early gains and closing sharply lower after the White House confirmed a sweeping 104% tariff on all Chinese imports, effective 12:01 a.m. ET.
The S&P 500 and Nasdaq Composite, which were both up over 4% earlier in the day, ended the session down 1.6% and 2.2%, respectively. The Dow Jones Industrial Average tumbled by over 300 points, closing down 0.8%, despite having surged more than 1,300 points earlier in intraday trade.
This significant turnaround in investor sentiment came as President Donald Trump escalated the trade war with China by locking in additional duties, pushing the overall tariff rate to 104%. The move effectively brought the S&P 500 close to bear market territory, signaling mounting fears of a broader economic fallout.
Oil prices nosedive to lowest since 2021
The ripple effect extended to crude markets as well. Brent crude fell over 2.5%, settling at $62.82 per barrel, while WTI crude dropped to $59.58, marking its lowest closing level since 2021. The energy market had initially posted gains but reversed course following the tariff announcement.
Crude has now fallen more than 15% since April 2, when Trump first unveiled plans to retaliate against China and other nations. The pressure intensified after Beijing hit back with 34% tariffs on US-made goods, prompting Trump to issue a fresh warning of an additional 50% tariff unless China removed its levies.
Markets are expected to remain volatile as investors weigh the global economic implications of the intensifying trade war between the world’s two largest economies.
