After massive surge on Wednesday, stock markets fall as trade war continues [Video]

U.S. stocks were diving on Thursday, surrendering much of their historic gains from the day before, as President Donald Trump’s trade war continues to confuse and threaten the economy — even if its temperature has cooled a bit.

The S&P 500 was down five per cent in midday trading, slicing into Wednesday’s surge of 9.5 per cent following Trump’s decision to pause many of his tariffs worldwide. The Dow Jones Industrial Average was down 1,724 points, or 4.2 per cent, as of 12:40 p.m. ET, and the Nasdaq Composite was 5.7 per cent lower.

On the Canadian market, the S&P/TSX composite index was down roughly 3.12 per cent at about 1 p.m. ET.

“Trump blinks,” UBS chief strategist Bhanu Baweja wrote in a report about the president’s decision on tariffs, “but the damage isn’t all undone.”

Trump has focused more on China, raising the total tariffs on its products to …