US stocks close sharply lower, wiping away some of historic rally a day earlier

NEW YORK -- U.S. stocks closed sharply lower on Thursday, wiping away some of the previous day's rally as investors digested President Donald Trump's decision to suspend some tariffs while escalating a trade war with China.

Hours after markets opened, the White House said U.S. tariffs on China stand at 145%, more than the 125% levy that had been widely reported a day earlier. The news sent shares falling further than they had earlier in the day.

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The Dow Jones Industrial Average dropped 1,014 points, or 2.5%, at the market close. The S&P 500 fell 3.4%, while the tech-heavy Nasdaq plunged 4.3%.

Footwear giant Nike, which boasts a sprawling global supply chain, saw shares plummet 8%.

Tesla, the electric carmaker led by Trump-adviser Elon Musk, fell 7%. Shares of chipmaker Nvidia dropped 5%.

Some major companies extended gains from a day earlier.

Telecoms AT&T and Verizon each ticked up more than 1.25%.

China rebuked the U.S. early Thursday morning in response to Trump's decision to hike cumulative tariffs on Chinese goods to 145%. Beijing said it would restrict imports of Hollywood films.

The U.S. is wielding "tariffs as a weapon to exert maximum pressure and seek selfish gains," Chinese Foreign Ministry spokesperson Lin Jian told reporters at a Thursday briefing.

Stock market losses early on Thursday erased some of the historic rally on Wednesday, set off by Trump's tariff announcement. The Nasdaq soared 12.1% at Wednesday's close, the index's largest single-day gain since 2021. The Dow jumped 7.8%, its biggest one-day increase in five years.

On Wednesday afternoon, Trump announced a 90-day pause on the higher tariffs for most countries that he announced last week, while maintaining a 10% baseline tariff across the board.

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Trump also announced additional tariffs on China, increasing the cumulative tariffs on Chinese goods from 104% to 125%.

Before the downturn in U.S. shares, Asian and European markets rallied on Thursday.

Key Asian indices recorded notable recoveries on Thursday -- marking a reprieve for most after a week of turbulence and selloffs driven by fears of escalating trade wars and recessions.

In Japan, the Nikkei 225 closed 9.1% and the broader TOPIX index closed up 8%. South Korea's Kospi closed up nearly 6.6%.

Taiwan's Taiex index jumped 9.3% and Australia's ASX 200 rose 4.5%.

Key Chinese markets were also in the green, despite Trump's decision to raise tariffs on Chinese goods to a total of 125%. The president alleged a "lack of respect" from Beijing, his latest broadside coming after China announced 84% reciprocal tariffs on U.S. goods on Wednesday.

Hong Kong's Hang Seng Index climbed 2%, the Shanghai Composite Index jumped 1.1% and the Shenzhen Component Index rose 2.2%.

In Europe, the pan-continental STOXX 600 index jumped more than 7%. On Thursday, the European Union announced a 90-day pause in retaliatory tariffs targeting the U.S., which the EU had approved a day earlier.

Upon opening, Britain's FTSE 100 climbed 6%, France's CAC 40 6.4%, Germany's DAX 8%, Italy's FTSE MIB 7.5% and Spain's IBEX 7.2%.