Wall Street suffered another brutal selloff on Thursday, with the S&P 500 plummeting 3.46% and the tech-heavy Nasdaq tumbling 4.31%, as investors grappled with the economic implications of President Donald Trump’s sweeping tariff policies.

The sharp decline came just one day after markets enjoyed their largest single-day rally since World War II, underscoring the wild volatility that has gripped financial markets since Trump’s “Liberation Day” announcement last week.

“A Beautiful Thing” Amid Market Carnage

Despite the market turmoil, Trump remained steadfast during a cabinet meeting, declaring that while there would be “transition costs” to his aggressive tariff strategy, “in the end it’s going to be a beautiful thing.”

“We’re doing what we should have done many years ago,” Trump asserted. “We let it get out of control, and we allowed some countries to get very big and very rich at our expense. And I’m not going to let that happen.”

The president’s comments came as markets reeled from his decision to maintain a blanket 10% tariff on most imported goods while raising levies on Chinese products to a staggering 145%.

Currency Markets in Turmoil

The dollar index continued its slide, trading near the 101 level as the currency weakened against major rivals. The euro surged toward the 1.1200 mark, posting one of its strongest daily gains in recent months and testing fresh 2025 highs.

Federal Reserve officials added to market anxiety, with Presidents Jeff Schmid and Lorie Logan warning that the trade actions risk worsening inflation and damaging the labour market.

Gold Soars as Investors Seek Safety

As stock markets tumbled, gold prices jumped to a record high of $3,171.49 an ounce, with investors flocking to the precious metal as a safe haven amidst growing economic uncertainty.

The simultaneous fall in stocks, bonds and the dollar prompted Deutsche Bank to describe the current situation as “uncharted territory,” noting the “simultaneous collapse in the price of all U.S. assets” – a highly unusual pattern as traditionally, during times of crisis, investors seek refuge in Treasury bonds and the dollar.

Political Fallout

Meanwhile, Democrats have called for an investigation into trading activity that preceded Trump’s announcement of a tariff pause, particularly after the president posted on social media that it was a “great time to buy” shortly before his announcement triggered massive market gains.

Senator Elizabeth Warren demanded “a full independent investigation on who was trading, who made money, who knew what and when.”

Republican Senator John Cornyn dismissed these concerns, saying “any idea of insider trading is ridiculous,” as it’s “pretty obvious that when a stock market is in a dip” it’s a good time to invest.

Looking Ahead

Despite the president’s optimistic assessment, analysts remain concerned about the long-term economic impact of the remaining tariffs. Oxford Economics lead analyst John Canavan noted that while the partial rollback provided some relief, it did not fundamentally alter the challenging outlook.

“The tariffs that remain are still high enough that they are likely to push up inflation and weigh significantly on the economy as we go forward,” Canavan warned.

As global trading partners scramble to negotiate exemptions from the new tariff regime, markets face continued volatility, with Deutsche Bank warning that escalating tensions with China could expand beyond trade into a broader financial conflict that would damage both economies.

“There is little room left for escalation on the trade front,” they cautioned. “There can be no winner to such a war.”