Wall Street closed sharply lower on Thursday, weighed down by the raging tariff war. Paring gains from the historic gains made in the session before, investor mood was dampened by escalating tensions due to the U.S. and China tariff war. All of the three most widely followed indexes closed the session deeply in the red.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 2.5%, or 1014.79 points, to close at 39,593.66. Twenty-four components of the 30-stock index ended in negative territory, while six ended in positive.

The tech-heavy Nasdaq Composite slid 737.66 points, or 4.3%, to close at 16,387.31.

The S&P 500 lost 188.85 points, or 3.5%, to close at 5,268.05. Ten of the 11 broad sectors of the benchmark index closed in the red, while one remained virtually unchanged. The Energy Select Sector SPDR (XLE), the Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) lost 6.5%, 4.7%, 3.9% and 3.5%, respectively.

The fear-gauge CBOE Volatility Index (VIX) increased 21.1% to 40.72. A total of 23.65 billion shares were traded on Thursday, widely surpassing the last 20-session average of 18.50 billion. Decliners outnumbered advancers by a 4.81-to-1 ratio on the NYSE and by 4.14-to-1 on the Nasdaq.

Lack of Clarity Continues to Sway the Markets

After witnessing historic gains on Wednesday on the back of the announcement of 90-day tariff delays on most countries by the Trump White House, Thursday brought about a scenario that has become a bit too frequent in recent sessions. Indexes gave up a major portion of the gains made on Wednesday and continued to bleed.

Growing concerns over the all-out trade between Beijing and Washington returned, muting the optimism arising out of the 90-day tariff pause from other countries and positive economic data. The lack of clarity about where these tariff announcements and step-backs are taking us weighed on the markets. The raging war between the United States and China, the two premier geopolitical powers, is especially threatening and wreaking havoc on global economies. President Trump raised the tariff on China to 145% on Thursday and yet cited his long-standing friendship with Chinese President Xi Jinping as a focal point to break this impasse. Market participants remain unsure.

Mega-cap growth stocks faced the wrath of the markets as a result. Consequently, shares of Amazon.com, Inc. (AMZN Quick QuoteAMZN - Free Report) and Meta Platforms, Inc. (META Quick QuoteMETA - Free Report) plunged 5.2% and 6.7%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Oil Prices Fall on Tariff Uncertainty

On Thursday, oil prices wiped out the last session's rally as investors placed their bet on the tariff war between Washington and Beijing escalating in the coming days. WTI crude fell $2.28, or 3.7%, to settle at $60.07/barrel. Brent crude fell $2.15, or 3.3%, to $63.33 a barrel.

Economic Data

The Department of Labor also reported that initial claims increased by 4,000 to 223,000 for the week ended April 5 from the previous week's unrevised level of 219,000. The 4-week moving average was 223,000, unchanged from the previous week's unrevised average of 223,000.

Continuing claims through the week ending March 29 were 1,850,000, a decrease of 43,000 from the previous week's revised level. The last week's level was revised down by 10,000 from 1,903,000 to 1,893,000. The 4-week moving average was 1,867,750, a decrease of 250 from the prior week's revised average. The previous week's average was revised down by 2,500 from 1,870,500 to 1,868,000.

Per the U.S. Bureau of Labor Statistics, the Consumer Price Index (“CPI”) decreased 0.1% in March. The number for February remained unrevised at 0.2%. Core CPI came in at an increase of 0.1% in March. The number for February remained unrevised at 0.2%.