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The Finance Base

Markets News, April 7, 2025: Dow and S&P 500 Close Lower After Tariff-Headline Whipsaw; Nasdaq Edges Higher

U.S. stocks reversed sharply on April 7, 2025, as a disputed report of a possible tariff pause was denied and President Trump threatened additional tariffs on China. The Dow and S&P 500 closed lower while the Nasdaq edged higher, amid extraordinary intraday swings.

By TheFinanceBase Team 3 min read
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U.S. stocks swung sharply on April 7, 2025, as conflicting tariff headlines drove a rally and then a reversal. The Dow Jones Industrial Average closed at 37,965.60, down 349.26 points (0.91%); the S&P 500 ended at 5,062.25, down 11.83 points (0.23%); and the Nasdaq Composite finished at 15,603.26, up 15.48 points (0.10%), according to Reuters.

The session followed the prior week’s tariff-driven selloff. Investors first reacted to a report that President Donald Trump might consider a 90-day tariff pause, then saw the White House deny that report and Trump threaten an additional tariff on Chinese imports. The small closing moves concealed extraordinary intraday volatility.

Why stocks reversed during the session

Trading opened under pressure amid fears that tariffs could weaken economic growth while raising prices. Stocks rallied after a report said Trump was considering a 90-day pause, but White House officials denied the report. Trump later threatened an additional 50% tariff on Chinese imports unless China withdrew its announced 34% retaliatory tariff, sending stocks lower again, according to Reuters, ABC News and CBS.

The pause was reported as a possibility, not enacted policy. The rapid sequence of reports, denials and threats made tariff headlines the main driver of the day’s price action.

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Closing figures and volatility markers

Index or measure April 7 result
Dow Jones Industrial Average 37,965.60; down 349.26 points (0.91%)
S&P 500 5,062.25; down 11.83 points (0.23%)
Nasdaq Composite 15,603.26; up 15.48 points (0.10%)
VIX Briefly above 60; closed at 46.98, its highest close in five years, according to Reuters
U.S. exchange trading volume 29.13 billion shares, compared with a 17.13 billion average for the prior 20 sessions, according to Reuters

ABC News reported that the Dow fell more than 1,700 points to its session low and then swung 2,595 points from that low. The S&P 500’s high-to-low spread was about 8.5%; ABC, citing S&P Global, reported that a move of that size had occurred only 20 times since 1962.

Tariff context and bear-market levels

The turmoil came after Trump’s April 2 announcement of a 10% baseline tariff on imports and higher country-specific reciprocal tariffs. The White House said the baseline rate would take effect April 5 and the higher individualized rates were scheduled for April 9. The administration’s fact sheet identified China’s reciprocal rate as 34%; Executive Order 14257 established the reciprocal-tariff framework.

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The S&P 500 briefly crossed the conventional 20% decline threshold from its February 19 record during intraday trading, but did not close in bear-market territory. S&P Dow Jones Indices later reported an April 7 intraday low of 4,835.04, 21.35% below the February 19 high of 6,147.43. The Nasdaq had already entered bear-market territory by the end of the previous week, while the Dow was in correction territory, generally defined as a decline of at least 10% from a recent high.

What the market was worried about

Investors faced the possibility that tariffs could both raise costs and weaken growth. Higher import costs may contribute to inflation, while trade disruption and policy uncertainty can weigh on business activity and confidence. Those competing risks also complicated expectations for Federal Reserve support if inflation remained elevated.

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CBS reported that Goldman Sachs economists raised their estimated recession probability to 45% on April 7, citing larger tariffs, policy uncertainty, and deteriorating business and consumer confidence. That was an attributed forecast, not a confirmed outcome.

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FAQ

Did the S&P 500 close in a bear market on April 7, 2025?

No. It briefly crossed the conventional 20% decline threshold during intraday trading, but finished above that threshold on a closing basis.

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Did the United States enact a 90-day tariff pause that day?

No. A report said Trump might consider a 90-day pause, but White House officials denied it. It was not an enacted policy.

Why did stocks fall again after rallying?

The rally followed the tariff-pause report. Stocks reversed after the White House denied the report and Trump threatened an additional 50% tariff on Chinese imports unless China withdrew its announced 34% retaliatory tariff.

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How did the major U.S. indexes finish?

The Dow fell 0.91%, the S&P 500 fell 0.23%, and the Nasdaq gained 0.10%, according to Reuters.

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