WASHINGTON (dpa-AFX) - After recovering from an early slump to end Wednesday's session mostly higher, stocks plummeted at the start of trading on Thursday and remain sharply lower. With the steep drop, the S&P 500 has plunged to its lowest intraday level in almost seven months.
The major averages have seen further downside in recent trading, hitting new lows for the session. The Nasdaq is down 995.06 points or 5.7 percent at 16,605.98, the S&P 500 is down 246.70 points or 4.4 percent at 5,424.27 and the Dow is down 1,555.91 points or 3.7 percent at 40,669.41.
The sell-off on Wall Street comes after President Donald Trump delivered a highly anticipated speech on Wednesday outlining his plan to impose sweeping tariffs on U.S. trade partners.
Trump's 'reciprocal tariff' plan calls for a baseline 10 percent tariff to be imposed on all U.S. imports except those compliant with the United States-Mexico-Canada Agreement.
Certain countries deemed the 'worst offenders' will face much higher tariffs, with countries like Cambodia, Laos, Madagascar and Vietnam set to be charged nearly 50 percent.
China, which will face a 54 percent tariff rate when the new levies are combined with existing duties, has vowed to take countermeasures.
Canada and the European Union are also preparing countermeasures, leading to concerns about a trade war that could fuel inflation and damage the global economy.
'The roller coaster ride continues as the initial leaks were positive (only 10% baseline tariffs), but then the details were released and they were far worse than expected (24-49% outside of the EU and UK),' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
He added, 'The silver lining for investors could be that this is only a starting point for negotiations with other countries and ultimately tariff rates will come down across the board - but for now traders are shooting first and asking questions later.'
Possibly adding to the negative sentiment, the Institute for Supply Management released a report showing U.S. service sector growth slowed by more than anticipated in the month of March.
The ISM said its services PMI fell to 50.8 in March after inching up to 53.5 in February. While a reading above 50 still indicates growth, economists had expected the index to show a more modest decrease to 53.0.
Sector News
Computer hardware stocks are turning in some of the market's worst performances on the day, with the NYSE Arca Computer Hardware Index plummeting by 11.2 percent to its lowest intraday level in over a year.
Substantial weakness is also visible among banking stocks, as reflected by the 8.6 percent nosedive by the KBW Bank Index. The index has plunged to a six-month intraday low.
Networking stocks have also shown a significant move to the downside, dragging the NYSE Arca Networking Index down by 8.3 percent to its lowest intraday level in nearly six months.
Transportation, oil producer and semiconductor stocks are also seeing considerable weakness amid a broad based sell-off on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index plunged by 2.8 percent, while Hong Kong's Hang Seng Index slumped by 1.5 percent.
The major European markets have also shown significant moves to the downside on the day. While the French CAC 40 Index is down by 3.1 percent, the German DAX Index is down by 2.7 percent and the U.K.'s FTSE 100 Index is down by 1.4 percent.
In the bond market, treasuries have skyrocketed in reaction to Trump's tariff announcement. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 17.4 basis points at 4.021 percent.
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