Today’s Midday Market Update: Markets Retreat After Historic Rally as US-China Trade Tensions Escalate
Market Indexes Pull Back Sharply After Wednesday’s Historic Gains
As of midday Thursday, April 10, 2025, major U.S. stock indexes are experiencing significant declines, giving back a portion of Wednesday’s historic rally. The S&P 500 has fallen 3.17% to 5,283.71, the Dow Jones Industrial Average has dropped 2.61% to 39,547.18, and the tech-heavy Nasdaq Composite has tumbled 3.81% to 16,472.68.
This pullback follows what was one of the biggest one-day rallies since World War II on Wednesday, when markets surged after President Trump announced a 90-day pause on most reciprocal tariffs for non-retaliatory U.S. trading partners. However, investors are now reassessing the impact of Trump’s decision to raise tariffs on Chinese imports to 125%, up from 104%, while Beijing has imposed 84% tariffs on U.S. goods in retaliation.
Trade War Escalation Weighs on Investor Sentiment
The market euphoria following President Trump’s tariff pause announcement has quickly given way to concerns about a direct U.S.-China trade confrontation. Despite Wednesday’s surge, the S&P 500 and Dow remain approximately 4% below levels seen before the reciprocal tariffs were announced last week.
Oil prices have retreated today, dropping 4.64% to $59.46 per barrel, as China is the world’s largest crude importer. This decline has particularly impacted energy stocks, with companies like APA Corporation (APA) down 12.93% and Murphy Oil Corporation (MUR) falling 12.51%.
Treasury yields have also pulled back, with the 10-year yield falling to around 4.35% after experiencing significant volatility in recent sessions.
Tech Stocks Lead Market Decline
Technology stocks, which led yesterday’s rally, are among today’s biggest decliners. The “Magnificent 7” stocks had added more than $1.5 trillion in market capitalization during Wednesday’s session but are now giving back some of those gains.
NVIDIA Corporation (NVDA) is down 4.20% to $109.53, Tesla (TSLA) has fallen 7.31% to $252.32, and Intel Corporation (INTC) has declined 6.20% to $20.19. Other notable tech declines include Palantir Technologies (PLTR) dropping 3.22% and Ford Motor Company (F) falling 4.10%.
Despite today’s pullback, Wall Street analysts maintain a “Strong Buy” consensus rating on several Magnificent 7 stocks, including NVIDIA, Microsoft (MSFT), Amazon (AMZN), and Meta Platforms (META), with NVDA offering the highest upside potential among them.
Notable Stock Movers
Among today’s biggest losers is Barry Callebaut AG (BRRLY), down 22.36% after warning of a 12-month delay to its planned savings program due to surging cocoa prices impacting demand.
CarMax (KMX) has plunged 20.43% after the company announced it was suspending its long-term financial targets “given the potential impact of broader macro factors.” Analysts have noted that both new and used cars are likely to become thousands of dollars more expensive as a result of the Trump administration’s tariffs.
On the positive side, some gold-related stocks are performing well as investors seek safe havens, with Gold Fields Limited (GFI) up 8.17% and Harmony Gold Mining Company (HMY) gaining 7.86%.
Upcoming Market Events and Earnings
Investors are closely watching today’s release of March consumer price index (CPI) data, which economists expect to show headline inflation easing to 2.6% from 2.8% last month on a yearly basis. This data is particularly significant given concerns that Trump’s tariffs could hamper global growth and spur inflation.
Today is also a busy day for corporate earnings, with 216 companies scheduled to report results.
Analysts at FactSet estimate a year-over-year earnings growth rate of 7.3% for S&P 500 companies in Q1 2025, which would mark the seventh straight quarter of year-over-year earnings growth for the index.
Market Outlook
Despite the current volatility, market participants will be closely monitoring how major tech companies adjust their investment and capital expenditure budgets in response to the tariff situation. Alphabet (GOOGL), Google’s parent company, has already confirmed it will stick to its planned $75 billion spending for fiscal 2025.
Traders are currently pricing in at least three 25-basis point interest rate cuts from the Federal Reserve this year, starting in June, according to LSEG data.
As markets navigate this period of uncertainty, investors should remain vigilant about potential developments in U.S.-China trade relations and their implications for global economic growth and corporate earnings in the coming quarters.
