US stocks slowed down on Wednesday after two days of strong gains. Conflicting messages from the Trump administration about tariffs on China made investors nervous again. While President Trump promised to reduce tariffs, he shared few details. These unclear signals caused market gains to fade by the end of the day.
Stocks Rally Early but Lose Strength Late
The S&P 500 index jumped 3.6% at one point on Wednesday. But by the close, it was only up 1.67%. This still marked its second straight day of gains. However, hopes for a longer rally weakened when different reports and official statements didn’t match up.
The Wall Street Journal reported that the administration was thinking of reducing China tariffs to 50–65%. Other sources said there could be 35% tariffs on non-essential goods and 100% tariffs on key items like semiconductors and solar panels. But Treasury Secretary Scott Bessent quickly rejected those reports. He said there were no official plans to lower tariffs and claimed the news was just speculation.
Instead, Bessent spoke about finding new ways to handle trade and called for an end to China’s “developing country” label. He argued that China is too large an economy to get special benefits from trade rules that are usually meant for smaller or poorer nations.
Auto Tariff Confusion Adds to Market Worries
Another topic that added to the market’s uncertainty was auto tariffs. President Trump denied any plans to cut tariffs on Chinese auto parts, even though some media outlets claimed otherwise. He even talked about raising tariffs on Canadian parts, despite defending a one-month exemption under the USMCA trade agreement.
Earlier this month, Trump had announced a 25% tariff on all auto imports. But now, there seems to be no clear policy. This back-and-forth has made investors unsure of what to expect next.
Market analyst Michael Brown explained that unclear messages from the White House harm investor confidence. He said, “Chaotic messaging from top officials makes it harder for markets to trust US policy. This kind of behavior keeps fueling the ‘sell America’ trend we are seeing from global investors.”
Market Reactions: Futures Dip, Gold Gains
As the confusion spread, stock futures started to drop during the Asian trading session on Thursday. Dow Jones futures fell by 0.28%, S&P 500 futures dropped 0.14%, and Nasdaq futures were down 0.22%.
In Asia, markets showed a mix of results.
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Hong Kong’s Hang Seng Index dropped 1.23%
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South Korea’s Kospi lost 0.33%
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Japan’s Nikkei gained 0.58%
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Australia’s ASX 200 rose 0.66%
European markets showed similar mixed movement. Germany’s DAX index was one of the few bright spots, climbing 3.14% and reaching a one-month high. The Euro Stoxx 600 also rose by 1.8%, thanks to improving economic signs from within the eurozone.
Currency and Gold Markets Respond
The euro dropped against the US dollar for the second day in a row. The EUR/USD exchange rate fell to 1.13, down from 1.1566 earlier this week. Analysts believe Trump’s recent comments have strengthened the dollar. Still, some question how long this rally can last.
At the same time, gold prices rebounded as investors looked for safer options.
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Spot gold increased by 1.2%, trading at $3,329 per ounce early Thursday
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Gold futures rose 1.3%, reaching $3,338 per ounce
The rebound came after gold suffered recent losses when investor focus shifted to stocks. But with policy uncertainty back in the picture, gold’s appeal as a safe haven returned quickly.
Economic Outlook Remains Uncertain
The lack of clear policy from the White House has left markets guessing. While a tariff reduction could help global trade and ease pressure on markets, mixed messages from President Trump and his officials are doing the opposite.
Some investors hoped that Wednesday’s rally would signal a strong comeback. But without firm guidance on trade or economic policy, many now worry the recent gains were just temporary.
The broader concern is whether the administration can build trust with the market. As Michael Brown warned, “If every policy shift comes with a correction the next day, you can’t expect investors to stay in for the long haul.”
With more tariff discussions expected in the coming weeks, markets will continue to watch every word from Washington closely.
After a quick burst of optimism, US stocks are once again caught in the web of trade uncertainty. The Trump administration’s mixed signals about tariffs on China and autos have put the market rally on hold. Investors remain cautious, waiting for more solid policy before making their next move. As global markets react and safe-haven assets rise, confidence in US trade leadership remains in question.