WASHINGTON (dpa-AFX) - After skyrocketing over the course of the previous session, stocks have shown a substantial move back to the downside during trading on Thursday. The major averages have all pulled back sharply following Wednesday's historic gains.
Currently, the major averages are just off their lows of the session. The Nasdaq is down 654.06 points or 3.8 percent at 16,407.91, the S&P 500 is down 174.60 points or 3.2 percent at 5,282.30 and the Dow is down 1,068.04 points or 2.6 percent at 39,540.41.
The sharp pullback on Wall Street comes as traders look to cash in on the spike seen in afternoon trading on Wednesday after President Donald Trump announced a 90-day pause on new 'reciprocal tariffs.'
Ongoing concerns about rising trade tensions between the U.S. and China are also weighing on the markets, as Trump excluded the country from the pause and even raised the tariff on Chinese goods to 125 percent.
Uncertainty about what will happen between now and the end of the 90-day pause may also be leading to some apprehension on Wall Street.
'While the 90-day pause is welcome news for stocks, the lack of long-term clarity may become more of an issue as time goes on,' said AJ Bell investment director Russ Mould.
Meanwhile, traders have largely shrugged off a Labor Department report unexpectedly showing a slight decrease by U.S. consumer prices in the month of March, potentially viewing the data as 'old news.'
The report said the consumer price index edged down by 0.1 percent in March after rising by 0.2 percent in February. Economists had expected consumer prices to inch up by 0.1 percent.
Excluding food and energy prices, the core consumer price index crept up by 0.1 in March after rising by 0.2 percent in February. Core prices were expected to rise by 0.3 percent.
The report also said the annual rate of consumer price growth slowed to 2.4 in March from 2.8 percent in February. Economists had expected the pace of price growth to slow to 2.6 percent.
The annual rate of core consumer price growth also fell to 2.8 percent in March from 3.1 percent in February. Core price growth was expected to dip to 3.0 percent.
'The March CPI was stale data even before it was released given the large tariff changes in motion and the inflationary impact it will have in the coming months,' said Nationwide Chief Economist Kathy Bostjancic.
She added, 'While it is marginally helpful to have a softer reading heading into the ratcheting up of tariffs, many of the categories that experienced a decline or were tame will face upward pressure in the coming months.'
A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits crept slightly higher in the week ended April 5th.
Sector News
Oil service stocks have pulled back sharply along with the price of crude oil, dragging the Philadelphia Oil Service Index down by 7.5 percent.
Substantial weakness is also visible among semiconductor stocks, as reflected by the 6.5 plunge by the Philadelphia Semiconductor Index.
Airline stocks have also shown a significant move back to the downside, resulting in a 6.0 percent nosedive by the NYSE Arca Airline Index.
Oil producer, biotechnology, banking and pharmaceutical stocks are also saw considerable weakness, while gold stocks are bucking the downtrend amid an extended rebound by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Thursday. Japan's Nikkei 225 Index skyrocketed by 9.1 percent, South Korea's Kospi shot up by 6.6 percent and China's Shanghai Composite Index jumped by 1.2 percent.
The major European markets have also shown substantial moves back to the upside on the day. While the German DAX Index is up by 5.6 percent, the French CAC 40 Index is up by 4.6 percent and the U.K.'s FTSE 100 Index is up by 4.0 percent.
In the bond market, treasuries are regaining ground following the steep drop seen over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.0 basis points at 4.326 percent.
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