US stock indexes drop 2% despite an encouraging inflation update as Trump’s trade war still weighs

By STAN CHOE Associated Press Business Writer NEW YORK AP U S stocks on Thursday are giving back specific of their historic gains from the day before as Wall Street weighs a global commerce war that has cooled in temperature but is still threatening the economic system The S P was down a day after surging following President Donald Trump s decision to pause multiple of his tariffs worldwide The Dow Jones Industrial Average was down points or as of a m Eastern time and the Nasdaq composite was lower Even a better-than-expected overview on inflation Thursday morning wasn t enough to get U S stocks to add to their surges from the day before including the S P s third-best since Economists revealed the information wasn t useful because it offered a view only of the past when inflation may rise in coming months because of tariffs A better-than-expected account on joblessness didn t help much either with Wall Street s focus entirely on what s to come Trump blinks UBS strategist Bhanu Baweja explained about the president s decision on tariffs but the damage isn t all undone Trump has focused more on China raising his tariffs on products coming from the world s second-largest commercial sector to Even if that were to get negotiated down to something like and even if only tariffs remained on other countries Baweja reported the hit to the U S financial system could still be large enough to hurt expected progress for upcoming U S corporate profits China meanwhile has been reaching out to other countries around the world in hopes of forming a united front against Trump The European Union though on Thursday stated it will put its arrangement retaliation measures on hold for days and leave room for a negotiated remedy Related Articles Inflation fell last month as gas prices dropped sharply a sign prices cooling before tariffs US jobless benefit applications rise modestly as labor sphere remains largely unfazed by contract war Egg prices continue to increase despite bird flu outbreak slowing Former Facebook executive tells Senate committee company undermined US national guard with China US Postal Utility seeks to hike cost of a first-class stamp to cents Trump and his Treasury secretary Scott Bessent sent a clear message to other countries Wednesday after announcing their tariff pause Do not retaliate and you will be rewarded That has numerous on Wall Street prepared for still more wild swings to come in the domain after the S P at one point nearly dropped into a bear sector by almost closing below its record Often the whipsaw moves had come not just day to day but also hour to hour The S P still remains below where it was when Trump publicized his sweeping set of tariffs last week on Liberation Day Everything is still very volatile because with Donald Trump you don t know what to expect announced Francis Lun chief executive of Geo Securities This is really big uncertainty in the territory The threat of recession has not faded One encouraging signal though is coming from the bond territory where stress seems to be easing a bit Big jumps for Treasury yields earlier this week had rattled the territory so much that Trump commented Wednesday he had been watching how investors were getting a little queasy Several reasons could have been behind the sharp sudden rise including hedge funds having to sell their Treasurys in order to raise cash or investors outside the United States dumping their U S investments because of the arrangement war Regardless of the reasons behind it higher yields on Treasurys crank up pressure on the stock sphere and push rates higher for mortgages and other loans for U S households and businesses But the -year Treasury yield has calmed over the last day and was sitting at That s after it had shot up to nearly Wednesday morning from just at the end of last week In stock markets abroad indexes rallied across Europe and Asia in their first chances to pact following Trump s pause Japan s Nikkei surged South Korea s Kospi leaped and Germany s DAX returned AP Business Writers Yuri Kageyama and Matt Ott contributed