U.S. stocks open lower a day after mammoth rally

Wall Street stocks opened decisively lower on Thursday, giving back a fraction of the gains from the prior session's surge after U.S. President Donald Trump backed down on many of his trade tariffs.

All three major indices were firmly in the red after notching some of the biggest single-day gains in history the prior day.

About 15 minutes into trading, the Dow Jones Industrial Average was down 1.8 percent at 39,859.39.

The broad-based S&P 500 fell 2.2 percent to 5,335.61, while the tech-rich Nasdaq Composite Index shed 2.8 percent to 16,653.99.

The declines came as U.S. consumer inflation contracted 0.1 percent from a month earlier in a reading that was lower than analyst expectations. Some market watchers said the inflation reading boosts the odds of Federal Reserve interest rate cuts.

But analysts described the inflation reading as a secondary issue early Thursday compared with reverberations from Trump's tariff actions on Wednesday, which prompted huge equity rallies in Asia and Europe.

The "backtracking" in U.S. stocks "is not surprising," said Briefing.com analyst Patrick O'Hare.

"Given the scope of yesterday's gains, we suspect plenty of participants saw that as a gift that made them close to whole again in terms of the tariff sell-off and are opting to get out knowing that the tariff, economic, and earnings uncertainty was not resolved with yesterday's 90-day pause (key word) and escalated tariff action for China."

Global markets were rattled by Trump's sweeping tariff actions, lifting the yields on U.S. Treasury bonds that some analysts say constituted the critical factor in Trump's policy reversal.