Breaking news:As U.S. Buyers Cancel Orders, Chinese Factories Say No More Discounts:Read more

With the latest sharp escalation in tariffs on China, U.S. orders for Chinese factories are getting canceled and Chinese manufacturers say they can’t lower prices further for U.S. customers.

The declines accelerated after the White House said the tariffs imposed on China by President Trump in his second term add up to 145%, not the 125% it previously indicated. Stocks then pared those losses in afternoon trading.

The Nasdaq Composite, which posted its biggest gain in more than two decades on Wednesday, ended 4.3% lower. The Dow Jones Industrial Average shed 1,015 points, or 2.5%.

Bank stocks and tech shares were hit hard, retracing some of Wednesday’s epic gains. Wall Street’s fear gauge, the CBOE Volatility Index, was rising though far below levels of earlier this week. Gold climbed to a new record high in a sign of rising anxiety. The yield on benchmark 10-year Treasurys declined to 4.392%.

Global markets soared overnight, catching up with Wednesday’s epic tariff-pause rally in New York. But there was an undertone of skepticism: While the worst may have been avoided, tariffs are still likely to weigh on growth and boost inflation. Betting markets still call a recession even money, for whatever that’s worth.

Wall Street parsed the latest consumer-price index, which showed inflation slowing more than expected, to a 2.4% annual rate. Prices for shorter-dated Treasurys rallied, pushing down yields, following the CPI data.

On Thursday, the European Union said it will suspend its first wave of retaliatory duties against the U.S. for 90 days to focus on negotiations after the Trump administration’s pause.

Trump’s reciprocal tariffs on nearly 100 nations took effect Wednesday. Later, as he paused the levies on other nations, Trump said he had raised China’s import tax in response to its retaliatory measures.

In return, China said Thursday it would reduce imports of American movies, another bid to strike at U.S. services exports in an escalating trade war between the two countries.

Goldman Sachs cut its growth outlook for China, citing the impact of tariffs. The bank now projects China’s economy will expand 4% this year and 3.5% in 2026.

In recent trading:

U.S. stocks fell. The Nasdaq led the way lower. The S&P 500 ended 3.5% lower.

Gold prices rose, up 3.2% a day after their largest gain in five years and settling at a new record high of $3,155.20 a troy ounce.

Government bonds were mixed, with investors awaiting a $22 billion sale of 30-year U.S. Treasurys on Thursday.

The dollar extended its decline, down more than 1%.

Stocks jumped overseas, with the Nikkei rising 9.1% and European indexes up more than 3%.

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