April 8 (UPI) -- The U.S. stock market tumbled more than 300 points Tuesday to reverse an earlier rally after the Trump administration said it would move forward on its threat to impose a 50% tariff on Chinese goods, effective Wednesday.
Following an increase of more than 1,300 points earlier Tuesday on news that the United States was in tariff negotiations with a number of countries, the Dow Jones Industrial Average plummeted late in the day to close down 0.84% or 320.01 points at 37,645.59 as the new 50% tariff rate for China was confirmed.
The S&P 500 sank 1.57%, while the Nasdaq Composite closed down 2.15%.
The United States' new tariff rate for China is scheduled to go into effect Wednesday at 12:01 EDT. The 50% tariff, which would bring the overall tariff rate on Beijing to 104%, follows China's threat to impose a 34% tariff on U.S. imports starting Thursday.
Trump had posted to his Truth Social account Tuesday before 10 a.m., and announced, "I just had a great call with the Acting President of South Korea," and that "China also wants to make a deal, badly, but they don't know how to get it started. We are waiting for their call."
Trump had threatened to add the additional 50% tariff on Wednesday, if China failed to withdraw its 34% tax by Tuesday.
The initial jump-up for stocks also applied to foreign markets. Japan's benchmark Nikkei 225, which tracks over 200 of the country's biggest listed companies, closed 6% up, while in South Korea, the Kospi wrapped at 0.3% higher.
Australia's benchmark ASX 200 closed 2.3% upwards, as did Hong Kong's benchmark Hang Seng Index, which combines Hong Kong and mainland China's largest listed companies, with a finish of about 1.5% higher Tuesday. It had closed more than 13% lower on the day Monday, in the largest daily decline for the index since the 1997 Asian fiscal crisis.
In Europe, the benchmark STOXX 600 index had risen 2.7%. France's CAC index went up 2.5% as did Germany's DAX at 2.4%, while London's FTSE 100 index also went upwards with a 2.6%.
Treasury Secretary Scott Bessent posted to x Monday that "almost 70 countries have now approached us wanting to help rebalance global trade," and told CNBC Tuesday that the same amount of countries have approached the U.S. for tariff negotiations.
"If they come to the table with solid proposals," he said, "I think we can end up with some good deals. And part of the calculus of that may be that some part of the tariffs stay on."
The positive direction of the U.S. stock market early Tuesday is a far cry from Monday's downward day. Monday marked the highest trading volume for American markets in at least 18 years, at around 29 billion shares. The 30-stock Dow Jones Industrial Average sunk by over 1,700 points at one point. Before the day was over, the index swung 2,595 points, and the blue-chip index eventually closed down by 349 points, or 0.9%.
The S&P 500 temporarily entered bear market territory at the lows of Monday's session, down more than 20% from its record, but rebounded and finished the session slightly lower. The benchmark lost 10% in two days to end last week, its worst losses since 2020 during the COVID outbreak, on fears that the tariffs Trump imposed upon dozens of nations on his "Liberation Day" could lead to a recession.
