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US stocks ended lower on Thursday,MKS sports giving back gains from the previous day's historic rally as investors grew increasingly anxious over US tariff policies.

The Dow Jones Industrial Average sank 1,014.79 points, or 2.50 percent, to close at 39,593.66. The S&P 500 dropped 188.85 points, or 3.46 percent, to 5,268.05, while the Nasdaq Composite Index tumbled 737.66 points, or 4.31 percent, ending the day at 16,387.31.

Most sectors within the S&P 500 closed in the red, with energy and technology suffering the steepest losses, down 6.40 percent and 4.55 percent, respectively. Consumer staples was the lone gainer, rising modestly by 0.19 percent, the Xinhua News Agency reported.

Notable decliners included Apple and Tesla, which pulled back 4.2 percent and 7.3 percent, respectively. Nvidia lost nearly 6 percent, while Meta Platforms slipped almost 7 percent, the CNBC said.

According to the AP, the stock price of Warner Bros. Discovery, the company behind “A Minecraft Movie,” dropped 12.5 percent for one of Wall Street’s sharpest losses after China on Thursday announced the plan to moderately reduce the number of imported US films amid tariff hikes. The Walt Disney Co.’s stock sank 6.8 percent.

The US dollar index, which measures the dollar’s strength against six foreign currencies, tumbled 1.7 percent Thursday, hitting its lowest level since early October. The dollar has broadly weakened this year, a sign of investors’ concern about the health and stability of the US economy, according to the CNN.

Gold prices hit a fresh record high above $3,170 a troy ounce on Thursday. The yellow metal is considered a safe haven amid economic and geopolitical turmoil and just posted its best quarter since 1986, the CNN said.

The sharp reversal came after the White House clarified that the total effective tariff rate on Chinese imports had climbed to 145 percent, up from the 125 percent figure cited earlier in the week. That confirmation erased earlier optimism following the temporary reduction of tariffs on goods from other nations to 10 percent for a 90-day period, according to the Xinhua News Agency.

Even with the delay in some tariffs, the hike on China duties puts the effective tariff rate at a historic high, said Morgan Stanley, according to a CNBC report. “Delays help, but do not reduce uncertainty,” Michael Gapen, Morgan Stanley chief US economist, wrote in a Thursday note.

The reversal erased much of Wednesday’s rally as growing concerns over the escalating tariff war dampened optimism over upbeat economic data, according to the Reuters.

The Labor Department's Consumer Price Index report showed the prices consumers pay for a basket of goods unexpectedly edged lower in March, with core price growth cooling down 2.8 percent year-on-year, coming within one percentage point of the Federal Reserve's 2 percent inflation target.

But the Fed's path forward, in light of ongoing trade negotiations, is less clear. Fed Governor Michelle Bowman said on Thursday that the effects of US trade policies are unclear, while Chicago Fed President Austan Goolsbee said rate cuts could resume once the uncertainties surrounding trade policy are resolved, according to the Reuters.

Former Federal Reserve Chair Janet Yellen said Thursday on the CNN that US administration’s shifting tariff policy has increased the odds the US will enter into a recession. The tariffs will likely fuel a cutback in business investment and consumer spending, which could trigger an economic downturn, the Wall Street Journal reported.

Yellen said the administration’s tariff policies could cost the average US household $4,000 a year. “This is the worst self-inflicted wound that I have ever seen an administration impose on a well-functioning economy,” said Yellen.

The tariffs imposed on China could be particularly damaging, Yellen said. “They are going to result in massive impacts on the US and the global economy. No one knows where these policies are headed,” Yellen said.

Former Treasury Secretary Lawrence Summers also warned that the US is now likely headed toward a recession, with potentially 2 million Americans put out of work, thanks to the tariff increases now in train, the Bloomberg reported.

“It’s more likely than not that we’re going to have a recession — and in the context of a recession, we’ll see an extra 2 million people be unemployed,” Summers said on Bloomberg Television’s Wall Street Week with David Westin. “We’ll see losses in household income” of $5,000 per family or more, he said.

Global Times