Wall Street Tumbles, Dollar Crashes, Gold Hits Record Highs As Inflation Cools More Than Predicted: What's Driving Markets Thursday

After a spectacular risk-on rally on Wednesday, Wall Street sharply pulled back during Thursday’s trading, as investors digested the 90-day tariff pause and weighed lingering economic risks to the outlook.

Even a sharply lower-than-expected inflation report did little to support risk sentiment — a testament to how susceptible investors remain to economic uncertainty.

The Consumer Price Index fell from 2.8% year-over-year in February to 2.4% in March, below expectations of 2.6% and marking the lowest reading since September 2024. On a monthly basis, inflation was negative by 0.1% — the first decline since May 2020.

While the data bolstered the case for near-term Fed rate cuts — markets are pricing in an 88% chance of a 0.25% move by June — traders remained cautious amid the ongoing tariff drama.

Read Also: Inflation Cools, But ‘Too Soon To Blow The All Clear,’ Economist Says

The S&P 500 dropped 4.8% by midday in New York, erasing about half of Wednesday’s historic gains, which had marked the index’s strongest rally since 2008. The Nasdaq 100 tumbled 5.4%, while small caps in the Russell 2000 sank 5.3%.

Despite the pullback in equities, traditional safe havens like Treasuries and the dollar also fell, raising concerns about waning international confidence in U.S. assets.

The U.S. dollar index — as tracked by the Invesco DB USD Index Bullish Fund ETF UUP — nosedived 2% to the 101 level, its lowest since late September 2024.

Yields on 30-year Treasuries surged by 11 basis points to 4.85%, as bond vigilantes appeared to reassert themselves —effectively flashing red signals in Washington.

Meanwhile, gold continued to deliver stellar returns, with bullion hitting fresh record highs of $3,175 per ounce, up 2.4% on the day. Over the past two sessions, gold has rallied nearly 6%, the biggest two-day gain since March 2020.

On Thursday, the White House announced that the actual tariff rate on Chinese imports will be 145%. Meanwhile, the U.S. House of Representatives passed a budget plan extending the Trump-era tax cuts. Trump welcomed the news, saying it laid the groundwork for what he called “the largest tax and regulation cuts” in American history.

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY fell 5.2% to $517.46.
• The SPDR Dow Jones Industrial Average DIA fell 4% to $389.66.
• The tech-heavy Invesco QQQ Trust Series QQQ sunk 5.5% to $440.99.
• The iShares Russell 2000 ETF IWM tumbled 5.3% to $179.66.
• S&P 500 sectors with largest drops were Energy Select Sector SPDR Fund XLE, down 6.7%; Technology Select Sector SPDR Fund XLK, down 6% and Consumer Discretionary Select Sector SPDR Fund XLY, down 5.8%.

• There were only 22 gainers within the S&P 500, with Newmont Corp. NEM rallying 3.3%, amid rising gold prices.
• Major losers included CarMax Inc. KMX down 20%, Microchip Technology Inc. MCHP, down 14%, and Celanese Corp. CE, down 14%.
• Magnificent Seven were all trading deeply in negative territory, with the group shedding nearly a trillion of combined market value.

• NVIDIA Corporation NVDA
  Market Cap Loss: $209.24 billion
  Daily Change: -7.50%
• Apple Inc. AAPL
  Market Cap Loss: $181.32 billion
  Daily Change: -6.07%
• Amazon.com Inc. AMZN
  Market Cap Loss: $129.62 billion
  Daily Change: -6.40%
• Microsoft Corporation MSFT
  Market Cap Loss: $124.82 billion
  Daily Change: -4.30%
• Meta Platforms Inc. META
  Market Cap Loss: $102.56 billion
  Daily Change: -6.91%
• Tesla Inc. TSLA
  Market Cap Loss: $87.47 billion
  Daily Change: -9.99%
• Alphabet Inc. GOOG
  Market Cap Loss: $79.85 billion
  Daily Change: -4.10%

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