US close: Stocks swing into red as Trump hikes tariffs on China
By Benjamin Chiou
Date: Tuesday 08 Apr 2025
(Sharecast News) - US stocks sank sharply again on Tuesday despite starting off the session with decent gains, after Donald Trump followed through on his threat to hike tariffs on China, sending the S&P 500 to its lowest close in 14 months.
Markets initially rose strongly as investors attempted to pick up bargains after three days of heavy selling, but newsflow from the White House erased all gains by the early afternoon, and resulted in yet another sell-off across Wall Street.
The S&P 500 closed 1.6% lower (-80 points) at 4,983 - its first close below the 5,000 mark since February 2024 - with more than 350 points separating its intraday high and low. The Dow fell 0.8% to 37,646, while the Nasdaq sank 2.2% to 15,268.
In late-afternoon remarks, the White House confirmed that levies on Chinese imports into the US would be raised to 104% - slapping an additional 50% tariffs on the duties already announced last week - in response to Beijing's retaliation against Trump's initial tariff barrage.
Nevertheless, Treasury Secretary Scott Bessent said the administration was still up for negotiating with trading partners and claimed the US could "end up with some good deals". Trump had said earlier in the day that he was in talks with "many" leaders regarding deals.
"Trump seems confident that China will cave in and do a deal to avoid its economy being obliterated by sky-high tariffs. Reports that China will 'fight to the end' would suggest otherwise," said Dan Coatsworth, investment analyst at AJ Bell.
"What happens between the US and China in the coming days will have a major influence on the direction of markets. A deal could be positive for stocks and shares, but China standing firm could be the opposite."
In other news, oil prices sank to their lowest since 2021 after OPEC+ said it would raise production despite weaker projections for global economic growth. WTI crude was down 4.3% at $58.10 a barrel by the close of play in New York.
The yield on a 10-year US Treasury was up 10.6 basis points at 4.283%.
Market movers
Tech stocks, which had performed well early on, were sinking by the close, with Apple, Amazon, Nvidia and Intel posting sharp losses. Chip stock Broadcom was outperforming however after unveiling plans for a $10bn share buyback plan.
UnitedHealth, Humana and CVS Health were among the few risers after the Centers for Medicare and Medicaid Services announced government payments to Medicare Advantage plans that were higher than estimated.
Walgreens Boots Alliance fell despite posting stronger-than-expected adjusted earnings, buoyed by cost savings and modest growth in its US healthcare segment, even as it continued to scale back its struggling VillageMD business. The company reported a net loss of $2.9bn for its second quarter, down from a $5.9bn loss a year earlier.
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