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 certain of their historic gains from the day before as Wall Street weighs a global business war that has cooled in temperature but is still threatening the economic activity The S P was down a day after surging following President Donald Trump s decision to pause various 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 announced the records 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 financial market to Even if that were to get negotiated down to something like and even if only tariffs remained on other countries Baweja commented the hit to the U S economic activity could still be large enough to hurt expected expansion 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 reported it will put its pact retaliation measures on hold for days and leave room for a negotiated cure Related Articles US jobless benefit applications rise modestly as labor sector remains largely unfazed by agreement war Egg prices continue to increase despite bird flu outbreak slowing Cleanup underway of the Keystone oil pipeline spill in North Dakota Former Facebook executive tells Senate committee company undermined US national measure with China US Postal Arrangement 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 a large number of on Wall Street prepared for still more wild swings to come in the industry after the S P at one point nearly dropped into a bear arena 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 declared 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 noted Francis Lun chief executive of Geo Securities This is really big uncertainty in the region The threat of recession has not faded One encouraging signal though is coming from the bond domain where stress seems to be easing a bit Big jumps for Treasury yields earlier this week had rattled the realm so much that Trump declared 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 deal war Regardless of the reasons behind it higher yields on Treasurys crank up pressure on the stock territory 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 exchange 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