By Caroline Valetkevitch
NEW YORK (Reuters) -Stock indexes fell sharply and the dollar eased on Thursday, with the Nasdaq confirming it has been in a correction since peaking last December, as more announcements from U.S. President Donald Trump on tariffs fueled investor uncertainty.
The global bond market selloff continued, a day after the 10-year German Bund yield saw its biggest rise since the 1990s.
Trading was volatile as investors tried to stay on top of tariff headlines.
In the latest twist in his fast-changing trade policy, Trump on Thursday exempted goods from both Canada and Mexico under a North American trade pact for a month from the 25% tariffs that he had imposed earlier this week.
The 25% U.S. tariffs on imports from Mexico and Canada were imposed on Tuesday along with fresh duties on Chinese goods.
“Trump has been very confusing about these tariffs. One day they’re on and the next day they’re off for a month,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
“He did warn us that there was going to be some pain initially here, and the market doesn’t like pain,” he said.
With Thursday’s 2.6% decline, the Nasdaq was down a total of 10.4% from its record high close on December 16, meeting a widely used definition of a correction.
The Cboe Volatility index rose to 24.87, its highest closing level since December 18.
Adding to the negative tone, an index of chipmakers dropped 4.5% after a sales forecast from Marvell Technology failed to excite investors. Marvell shares fell 19.8% on the day.
The Dow Jones Industrial Average fell 427.51 points, or 0.99%, to 42,579.08, the S&P 500 fell 104.11 points, or 1.78%, to 5,738.52 and the Nasdaq Composite fell 483.48 points, or 2.61%, to 18,069.26.
MSCI’s gauge of stocks across the globe fell 8.33 points, or 0.97%, to 850.38. The pan-European STOXX 600 index slipped 0.03%.
The U.S. dollar weakened while the safe-haven yen and Swiss franc advanced as jittery investors turned risk-averse and worries mounted over the potential impact of Trump’s tariffs on the U.S. economy.
In afternoon trading, the dollar was down 0.9% against the yen to 147.65 yen, hitting a five-month low earlier of 147.31. Against the Swiss franc, the dollar dropped to a three-month low of 0.8828 franc, and last traded down 0.9% at 0.8827.
The single European currency was last down 0.05% at $1.0785, after earlier hitting a four-month high of $1.0854. The euro was on track for its biggest weekly jump since May 2009.
The European Central Bank cut interest rates as expected and also said monetary policy was becoming less restrictive, which traders took to mean another cut in April might not be a given.
