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A day after the relief rally, US stocks and dollar fall on lingering concerns about tariffs

Investors remained cautious on Thursday after President Donald Trump's decision to temporarily lower tariffs for many countries sparked a relief rally.

Gold prices rose nearly 3%, hitting an all-time record high. The dollar also hit a decade low against the Swiss Franc.

The majority of U.S. Treasurys prices are slightly higher. A strong bond auction held on Thursday helped to reduce demand concerns in the face of market volatility due to tariffs. Treasuries were down sharply this week.

Tariffs and the potential economic impact of the trade war remain a source of uncertainty.

Trump said on Wednesday that he will also raise the tariffs on Chinese imports. The White House confirmed that a blanket duty of 10% on nearly all U.S. imported goods will continue to be in place. The White House said on Thursday that the U.S. tariffs against China have now reached 145% following the latest increase.

Art Hogan is the chief market strategist for B Riley Wealth, based in New York.

Stocks fell despite U.S. consumer price data that showed unexpectedly lower prices in March.

Investors are also preparing for the beginning of U.S. quarterly earnings. Results from the largest U.S. financial institutions, including JPMorgan Chase, will be released on Friday.

Jake Dollarhide is the chief executive officer at Longbow Asset Management, a Tulsa-based asset management firm.

It may be that some of the relief they felt yesterday isn't as big as they had thought.

Since Trump's announcement late on April 2, the markets have been in turmoil.

After the whipsaw bounce of Wednesday and the selloff on Thursday, the S&P 500 remained 7,1% below its previous level just before the announcements about reciprocal tariffs last week.

The Dow Jones Industrial Average dropped 1,014.79 or 2.50% to 39,593.66, while the S&P 500 declined 188.85 or 3.46% to 5,268.05; and the Nasdaq Composite was down 737.66 or 4.31% to 16,387.36.

The MSCI index of global stocks fell 6.01 points or 0.77% to 779.27.

Trump's Wednesday reversal of tariffs had also driven overseas equity markets higher.

Stocks in Asia and Europe also ended sharply higher.

Ursula von der Leyen, chief of the European Commission, stated that the European Union would delay its retaliatory tariffs against American goods in response to Trump’s 90-day pause on tariffs. This is because countries within the EU are scrambling to strike trade deals with Washington.

The dollar dropped against its major counterparts. The dollar fell 3.89% against the Swiss Franc to 0.825. The euro rose by 2.23%. The dollar fell by 2.07% against the Japanese yen to 144.66.

U.S. Treasury Department

After a successful sale of 10-year notes the day before, there was good demand on Thursday for 30-year bonds. This eased concerns that the debt would be closed.

Analysts attribute the rapid increase in yields this week to large liquidity as hedge funds, other asset managers and traders unwind trades and sell assets due to margin demands and losses.

As the trade war between two of the largest economies in world intensified, there were also increasing concerns that a large Treasury holder, like China, might be selling some of its portfolio.

The yield on the 10-year bond fell 1 basis point in the last day to 4.386%. Meanwhile, the yield on the two-year sensitive note dropped 11 basis points to 3,843%. Prices and yields are opposite.

The oil prices dropped, wiping out the previous session's gains. U.S. crude fell $2.28 and settled at $60.07 per barrel, while Brent crude eased $2.15, ending at $63.33.

Gold spot was up 2.6% to $3,160.82 per ounce after reaching a session high of $3171.49 an ounce earlier.

(source: Reuters)