U.S. stocks dropped sharply on Tuesday, April 8, 2025, afternoon, closing significantly lower after the White House confirmed plans to implement a steep increase in tariffs on Chinese goods. The move pushed the S&P 500 close to bear market territory. The new tariff rate of 104% is set to take effect at 12:01 a.m. ET.
The S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC), which had both gained more than 4% earlier in the day, reversed course to close down by approximately 1.6% and 2.2%, respectively. The Dow Jones Industrial Average (^DJI) fell around 0.8%, losing over 300 points. Earlier in the session, the Dow had gained more than 1,300 points.
Data from Yahoo Finance shows that this marks the third consecutive day of major market swings, with volatility exceeding 6% each day. Such extreme moves have only occurred three other times in history: during the 1987 market crash, the 2008 financial crisis, and at the height of the COVID-19 pandemic.
During a press briefing earlier in the day, White House press secretary Karoline Leavitt addressed the growing concerns. She stated, “Americans do not need other countries as much as other countries need us.” She added, “President Trump has a spine of steel and he will not break.”
Investors had started to return to the market following Monday’s turbulent session, which was driven by the administration’s rapid escalation of tariffs. That session saw the Dow drop 350 points and the S&P 500 record a historic three-day decline.
Markets initially reacted positively on Tuesday to comments by Treasury Secretary Scott Bessent, who welcomed the start of bilateral trade talks with Japan. His remarks helped ease fears that the administration was unwilling to negotiate, especially after trade adviser Peter Navarro told the Financial Times that Trump’s tariffs were “not a negotiation.”
Despite ongoing discussions, the White House confirmed that the reciprocal tariffs will take effect as scheduled on Wednesday. Meanwhile, China responded firmly, warning it would “fight to the end” if the U.S. continued what Beijing officials described as “blackmail.”
