Volkswacht Bodensee - Wall Street rally fizzles as tariff fears resurface

Major US indices spent the entire day in the red, disappointing traders who had been hoping to extend Wednesday's rally following Trump's pivot on tariffs.

"There's still a lot of apprehension," said Tom Cahill of Ventura Wealth Management, who described the level of uncertainty now permeating markets as "nearly unprecedented for my 30-year career."

The broad-based S&P 500 finished down 3.5 percent at 5,268.05. The index had soared 9.5 percent on Wednesday.

The dreary US session also put a damper on the day's buoyant rounds in Europe and Asia, with Tokyo surging 9.1 percent and Frankfurt winning 4.5 percent.

"Asia markets are flipping the switch -- from fear to euphoria -- as Trump throws a 90-day lifeline, pausing the reciprocal tariff barrage," said Stephen Innes at SPI Asset Management.

The gains in Asia and Europe followed Wednesday's historic rally in New York following Trump's decision to pause for 90 days many of his most onerous tariffs on trading partners, while doubling down on levies on China.

US stocks wiped out trillions of dollars in value in the sessions after President Trump's "Liberation Day" tariff announcement before the president's reversal on Wednesday.

But by Thursday, investors realized that Trump's tariff pause "is not enough to get people back in this market," said Peter Tuchman, senior floor trader at TradeMas Securities.

"It's still no clarity," Tuchman said. "We're still in the midst of a major trade war with China, and so where do we go from here?"

Data showed that US consumer inflation contracted 0.1 percent from a month earlier in a reading that was lower than analyst expectations.

But traders have been unnerved by the massive reversals in Trump's policies, resulting in uncertainty that economists warn can paralyze consumers and businesses.

Oil prices tumbled on fears slowing growth would hit demand, while haven assets like gold and the Swiss franc benefitted from the search for safety.

The dollar, meanwhile, slid more than two percent against the euro, evidence of the diminishing outlook for the US economy.

"When you talk about rewriting the rules of economics, the result is going to be weaker growth in the United States," said Adam Button on ForexLive. "The market is looking ahead to a period where ultimately the US is going to have a terrible policy of slow growth and high inflation."

- Key figures around 2050 GMT -

New York - Dow: DOWN 2.5 percent at 39,593.66 (close)

New York - S&P 500: DOWN 3.5 percent at 5,268.05 (close)

New York - Nasdaq: DOWN 4.3 percent at 16,387.31 (close)

London - FTSE 100: UP 3.0 percent at 7,913.25 (close)

Paris - CAC 40: UP 3.8 percent at 7,126.02 (close)

Frankfurt - DAX: UP 4.5 percent at 20,562.73 (close)

Tokyo - Nikkei 225: UP 9.1 percent at 34,609.00 (close)

Hong Kong - Hang Seng Index: UP 2.1 percent at 20,681.78 (close)

Shanghai - Composite: UP 1.2 percent at 3,223.64 (close)

Euro/dollar: UP at $1.1183 from $1.0949

Dollar/yen: DOWN at 144.79 yen from 147.76 yen on Wednesday

Pound/dollar: UP at $1.2954 from $1.2820

Euro/pound: UP at 86.33 pence from 85.43 pence

West Texas Intermediate: DOWN 3.7 percent at $60.07 per barrel

Brent North Sea Crude: DOWN 3.3 percent at $63.33 per barrel

W.Huber--VB