BANGKOK (AP) — The Trump administration has taken its next steps toward imposing more tariffs on key imports, launching investigations into imports of computer chips, chip making equipment and pharmaceuticals.

The Department of Commerce posted notices about the probes late Monday on the Federal Register, seeking public comment within three weeks. It had not formally announced them earlier.

Although President Donald Trump paused most of his biggest tariff hikes last week for 90 days, apart from those for imports from China, he has said he still plans tariffs on pharmaceutical drugs, lumber, copper and computer chips.

The Commerce Department said it is investigating how imports of computer chips, equipment to make them and products that contain them — which include many daily necessities such as cars, refrigerators, smart phones and other items — affect national security. Section 232 of the Trade Expansion Act of 1962 permits the president to order tariffs for the sake of national security.

The probe includes assessing the potential for U.S. domestic production of computer chips to meet U.S. demand and the role of foreign manufacturing and assembly, testing and packaging in meeting those needs.

Among other aspects of the entire computer chip supply chain, the government intends to also study the risks of having computer chip production concentrated in other places and the impact on U.S. competitiveness from foreign government subsidies, “foreign unfair trade practices and state-sponsored overcapacity.”

After Trump said electronics would not be included in what his administration calls “reciprocal” tariffs of up to 50% on some nations, U.S. Commerce Secretary Howard Lutnick explained in an interview on ABC News that pharmaceuticals, semiconductors and autos will be handled with “sector specific” tariffs.

“And those are not available for negotiation,” Lutnick said. “They are just going to be part of making sure we reshore the core national security items that need to be made in this country. We need to make medicine in this country,” he said. “We need to make semiconductors.”

The investigation into pharmaceutical imports includes ingredients used to make such drugs and touches on many of the same aspects of relying on imports to make them.

Asked about his plans for more tariffs on pharmaceuticals, Trump said Monday, “Yeah, we’re going to be doing that.”

He said it would be in the “not too distant future.”

“We’re doing it because we want to make our own drugs,” he said.

More than 70% of the materials, or active pharmaceutical ingredients, used to make medicines made in the United States are produced in other countries, with India, the European Union and China leading suppliers. The U.S. produces about a fifth of all pharmaceuticals made worldwide, but consumes about 45%, far more than any other country.

The U.S. also is a major producer of semiconductors, but only in some areas. It relies heavily on imports from Taiwan and South Korea for certain kinds of advanced chips. In particular, Taiwan dominates advanced logic chip production at 92% of all fabrication capacity according to the International Trade Administration, with South Korea making 8%.

Products like laptops, smartphones and the components needed to make them accounted for nearly $174 billion in U.S. imports from China last year. The administration’s plans suggest that such electronics will still be taxed by previous (non-“reciprocal”) tariffs — and potentially under additional, sector-specific levies.

Although major computer chip makers like Taiwan Semiconductor Manufacturing Corp. are investing heavily in U.S. manufacturing facilities, partly due to incentives put in place during former President Joe Biden’s time in office, the costly process of changing entire supply chains would take years.

Separately, the Commerce Department said Monday that it was withdrawing from a 2019 agreement that had suspended an antidumping investigation into imports of fresh tomatoes from Mexico, effective in 90 days. It said the current arrangement failed to protect U.S. growers from “unfairly priced” imports of tomatoes. Most tomatoes from Mexico will be subject to a 20.91% tariff, it said.

NEW YORK (AP) — Stocks rose worldwide Monday after President Donald Trump relaxed some of his tariffs, for now at least, and as stress from within the U.S. bond market seems to be easing.

The S&P 500 climbed 0.8%, though trading was still shaky, and it briefly gave back all of its big early gain of 1.8%. The Dow Jones Industrial Average rose 312 points, or 0.8%, and the Nasdaq composite added 0.6%.

Apple and other technology companies helped lift Wall Street after Trump said he was exempting smartphones, computers and other electronics from some of his stiff tariffs, which could ultimately more than double prices for U.S. customers of products coming from China. Such an exemption would mean U.S. importers don’t have to choose between passing on the higher costs to their customers or taking a hit to their own profits.

Apple climbed 2.2%, and Dell Technologies rose 4%.

Automakers also rallied after Trump suggested he may announce pauses on tariffs next for the auto industry. General Motors rose 3.5%, and Ford Motor rallied 4.1%.

All told, the S&P 500 rose 42.61 points to 5,405.97. The Dow ones Industrial Average gained 312.08 to 40,524.79, and the Nasdaq composite climbed 107.03 to 16,831.48.

But such relief may ultimately prove fleeting. Trump’s tariff rollout has been full of fits and starts, and officials in his administration said this most recent exemption on electronics is only temporary.

That could keep uncertainty high for companies, which are trying to make long-term plans when conditions seem to change by the day. Such uncertainty sent the U.S. stock market last week to chaotic and historic swings, as investors struggled to catch up with Trump’s moves on tariffs, which could ultimately lead to a recession if not reduced.

China’s commerce ministry nevertheless welcomed the pause on electronics tariffs in a Sunday statement as a small step even as it called for the U.S. to completely cancel the rest of its tariffs. China’s leader Xi Jinping on Monday said no one wins in a trade war as he kicked off a diplomatic tour of Southeast Asia, hoping to present China as a force for stability in contrast with Trump’s frenetic moves on tariffs.

Elsewhere on Wall Street, Goldman Sachs rose 1.9% after reporting a stronger profit for the latest quarter than expected. It joined other big banks in doing so, such as JPMorgan Chase and Morgan Stanley.

Perhaps more encouragingly for Wall Street, the bond market also showed signs of increasing calm. Treasury yields eased following their sudden and scary rise last week, which seemed to rattle not only investors but also Trump.

Treasury yields usually drop when fear is high in the market because U.S. government bonds have historically been seen as some of the world’s safest investments, if not the safest. But last week, yields rose sharply for Treasury bonds in an usual move. The value of the U.S. dollar also fell against other currencies in another move suggesting investors may no longer see the United States as the best place to keep their cash during moments of stress.

Trump noted the moves in the bond market, which suggested investors “were getting a little queasy,” after he announced a 90-day pause on many of his tariffs last week.

That Trump acted only after the bond market made its scary move, but not after U.S. stock market began trembling, “reveals this administration’s Achilles’ heel,” according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

The yield on the 10-year Treasury eased back to 4.37%. It had jumped to 4.48% on Friday from 4.01% the week before.

Yields sank after the bond market got an encouraging update on expectations for inflation among U.S. consumers. While U.S. households raised their expectations for inflation in the year ahead, their expectations for inflation three and five years in the future were either unchanged or lower, according to a survey by the Federal Reserve Bank of New York.

That’s potentially good news for the Federal Reserve, which hates to see fast-rising expectations for longer-term inflation. Such expectations could kick off a feedback loop that drives behavior among consumers that only worsens inflation.

The value of the U.S. dollar, though, remained under pressure. It slipped against the euro and Japanese yen, while inching higher against the Canadian dollar.

In stock markets abroad, indexes climbed 2.4% in France, 2.9% in Germany, 1.2% in Japan and 1% in South Korea.

In China, stock indexes rose 2.4% in Hong Kong and 0.8% in Shanghai after the government reported that China’s exports surged 12.4% in March from a year earlier in a last-minute flurry of activity as companies rushed to beat increases in U.S. tariffs.

AP Writers Jiang Junzhe and Matt Ott contributed.

NEW YORK (AP) — The upheaval in stocks has been grabbing all the headlines, but there is a bigger problem looming in another corner of the financial markets that rarely gets headlines: Investors are dumping U.S. government bonds.

Normally, investors rush into Treasurys at a whiff of economic chaos but now they are selling them as not even the lure of higher interest payments on the bonds is getting them to buy. The freak development has experts worried that big banks, funds and traders are losing faith in America as a stable, predictable, good place to store their money.

“The fear is the U.S. is losing its standing as the safe haven,” said George Cipolloni, a fund manager at Penn Mutual Asset Management. “Our bond market is the biggest and most stable in the world, but when you add instability, bad things can happen.”

That could be bad news for taxpayers paying interest on the ballooning U.S. debt, consumers taking out mortgages or car loans — and for President Donald Trump, who had hoped his tariff pause earlier this week would restore confidence in the markets.

What’s happening?

A week ago, the yield on the 10-year Treasury was 4.01%. On Friday, the yield shot as high as 4.58% before sliding back to around 4.50%. That’s a major swing for the bond market, which measures moves by the hundredths of a percentage point.

Among the possible knock-on effects is a big hit to ordinary Americans in the form of higher interest rates on mortgages and car financing and other loans.

“As yields move higher, you’ll see your borrowing rates move higher, too,” said Brian Rehling, head of fixed income strategy at Wells Fargo Investment Institute. “And every corporation uses these funding markets. If they get more expensive, they’re going to have to pass along those costs customers or cut costs by cutting jobs.”

Treasury bonds are essentially IOUs from the U.S. government, and they’re how Washington pays its bills despite collecting less in revenue than it spends.

To be sure, no one can say exactly what mix of factors is behind the developing bond bust or how long it will last, but it’s rattling Wall Street nonetheless.

Bonds are supposed to move in the opposite direction as stocks, rising when stocks are falling. In this way, they act like shock absorbers to 401(k)s and other portfolios in stock market meltdowns, compensating somewhat for the losses.

“This is Econ 101,” said Jack McIntyre, portfolio manager for Brandywine Global, adding about the bond sell-off now, “It’s left people scratching their heads.”

The latest trigger for bond yields to go up was Friday’s worse-than-expected reading on sentiment among U.S. consumers, including expectations for much higher inflation ahead. But the unusual bond yield spike this week also reflects deeper worries as Trump’s tariffs threats and erratic policy moves have made America seem hostile and unstable — fears that are not likely to go away even after the tariff turmoil ends.

“When the issue is a broader loss of confidence in the United States, even a much fuller retreat on trade might not work” to bring yields down, wrote Sarah Bianchi and other analysts at investment bank Evercore ISI. “We’re not sure any of the tools remaining in Trump’s toolkit will be sufficient to fully staunch the bleeding.”

The White House did not respond immediately to a request for comment, but U.S. Treasury Secretary Scott Bessent has said the yield spike is not unusual or worrisome, pinning the blame on professional investors who had borrowed too much and needed to sell.

“I think that it is an uncomfortable but normal deleveraging that’s going on,” he told Fox News Thursday, adding that it “happens every couple of years.”

The influence of the bond market

Trump acknowledged that the bond market played a role in his decision Wednesday to put a 90-day pause on many tariffs, saying investors “were getting a little queasy.”

If indeed it was the bond market, and not stocks, that made him change course, it wouldn’t come as a surprise.

The bond market’s reaction to her tax and budget policy was behind the ouster of United Kingdom’s Liz Truss in 2022, whose 49 days made her Britain’s shortest-serving prime minister. James Carville, adviser to former U.S. President Bill Clinton, also famously said he’d like to be reincarnated as the bond market because of how much power it wields.

The instinctual rush into U.S. debt is so ingrained in investors it even happens when you’d least expect.

People poured money into U.S. Treasury bonds during 2009 Financial Crisis, for instance, even though U.S. was the source of the problem, specifically its housing market.

But to Wall Street pros it made sense: U.S. Treasurys are liquid, stable in price and you can buy and sell them with ease even during a panic, so of course businesses and traders would rush into them to wait out the storm.

Yields on U.S bonds quickly fell during that crisis, which had a benefit beyond cushioning personal financial portfolios. It also lowered borrowing costs, which helped businesses and consumers recover.

This time that natural corrective isn’t kicking in.

What’s causing the sell-off?

Aside from sudden jitters about the U.S., several other things could be triggering the bond sell-off.

Some experts speculate that China, a vast holder of U.S. government bonds, is dumping them in retaliation. But that seems unlikely since that would hurt the country, too. Selling Treasurys, or essentially exchanging U.S. dollars for Chinese yuan, would make China’s currency strengthen and its exports more expensive.

Another explanation is that a favored strategy of some hedge funds involving U.S. debt and lots of borrowing — called the basis trade — is going against them. That means their lenders are asking to get repaid and they need to raise cash.

“They are selling Treasurys and that is pushing up yields — that’s part of it,” said Mike Arone, chief investment strategist at State Street Global Advisors. “But the other part is that U.S. has become a less reliable global partner.”

Wells Fargo’s Rehling said he’s worried about a hit to confidence in the U.S., too, but that it’s way too early to be sure and that the sell-off may stop soon, anyway.

“If Treasurys are no longer the place to park your cash, where do you go?,” he said. “Is there another bond out there that is more liquid? I don’t think so.”

While U.S. President Donald Trump paused import taxes this week for other countries, he raised tariffs on China and they now total 145%. China has denounced the policy as “economic bullying” and promised countermeasures. The new tariffs begin Saturday.

Washington’s repeated raising of tariffs “will become a joke in the history of the world economy,” a Chinese Finance Ministry spokesman said in a statement announcing the new tariffs. “However, if the U.S. insists on continuing to substantially infringe on China’s interests, China will resolutely counter and fight to the end.”

China’s Commerce Ministry said it would file another lawsuit with the World Trade Organization against the U.S. tariffs.

“There are no winners in a tariff war,” Chinese leader Xi Jinping said during a meeting with the Spanish Prime Minister Pedro Sanchez, according to a readout from state broadcaster CCTV. “For more than 70 years, China has always relied on itself … and hard work for development, never relying on favors from anyone, and not fearing any unreasonable suppression.”

Chinese Foreign Minister Wang Yi on Friday said China stands firm against Trump’s tariffs not only to defend its own rights and interests but also to “safeguard the common interests of the international community to ensure that humanity is not dragged back into a jungle world where might makes right.”

Wang made the remarks when he met Rafael Mariano Grossi, director general of the International Atomic Energy Agency in Beijing. Wang said China will “work together with other countries to jointly resist all retrogressive actions in the world.”

Trump’s on-again, off-again measures have caused alarm in stock and bond markets and led some to warn that the U.S. could be headed for a recession. There was some relief when Trump paused the tariffs for most countries — but concerns remain since the U.S. and China are the world’s No. 1 and No. 2 economies, respectively.

“The risk that this escalating trade war tips the world into a recession is rising as the two largest and most powerful countries in the world continue to punch back with higher and higher tariffs,” Jennifer Lee, a senior economist at BMO Capital markets, wrote Friday. “No one truly knows when this will end.”

Chinese tariffs will affect goods like soybeans, aircrafts and their parts and drugs — all among the country’s major imports from the U.S. Beijing, meanwhile, suspended sorghum, poultry and bonemeal imports from some American companies last week, and put more export controls on rare earth minerals, critical for various technologies.

The United States’ top imports from China, meanwhile, include electronics, like computers and cell phones, industrial equipment and toys — and consumers and businesses are likely to see prices rise on those products, with tariffs now at 145%.

Trump announced on Wednesday that China would face 125% tariffs, but he did not include a 20% tariff on China tied to its role in fentanyl production.

White House officials hope the import taxes will create more manufacturing jobs by bringing production back to the United States — a politically risky trade-off that could take years to materialize, if at all.

This story has been updated to correct the attribution of the quote about the U.S. raising tariffs to a spokesman from the Finance Ministry spokesman, not the Commerce Ministry.

WASHINGTON (AP) — President Donald Trump’s new tariffs threaten to push up prices on clothes, mobile phones, furniture and many other products in the coming months, possibly ending the era of cheap goods that Americans enjoyed for about a quarter-century before the pandemic.

In return, White House officials hope the import taxes create more high-paying manufacturing jobs by bringing production back to the United States. It is a politically risky trade-off that could take years to materialize, and it would have to overcome tall barriers, such as the automation of most modern factories.

Even after Trump’s U-turn on Wednesday that paused steep new tariffs on about 60 nations for 90 days, average U.S. duties remain much higher than a couple of months ago.

Trump has imposed a 10% tariff on all imports, while goods from China — the United States’ third-largest source of imports — face huge 145% duties. And there are 25% taxes on imports of steel, aluminum, cars, and roughly half of goods from Canada and Mexico.

As a result, the average U.S. tariff has soared from below 3% before Trump’s inauguration to roughly 20% now, economists calculate, the highest level since at least the 1940s.

Globalization’s effect on prices

Should they remain in place, such high duties would reverse decades of globalization that helped lower costs for American shoppers.

Other trends, including factory automation and technological innovation, particularly in electronics such as TVs, have also brought down prices. But imports help keep prices in check, economists say, partly because of lower labor costs overseas and because increased competition in the U.S. market forces American companies to be more efficient.

“Freer trade has helped moderate inflation over the long term,” said Scott Lincicome, a trade analyst at the libertarian Cato Institute. “If we are entering a more restricted supply side … then you’re likely to see more expensive stuff,” Lincicome said.

Bank of America estimates that the new duties could raise car prices an average of $4,500, even assuming that automakers absorb some of the tariffs’ impact. Such an increase would follow sharp price hikes of the past few years that have left the average price of a new car at a painful $48,000.

Aaron Rubin, CEO of ShipHero LLC, which provides software for merchants to help book shipments and track order deliveries, said his data indicates that retailers are already starting to raise prices to get ahead of the tariffs.

ShipHero’s data captures prices on several million products equivalent to about 1% of overall U.S. e-commerce sales. Prices rose 3.9% on Sunday and Monday on a variety of goods compared with the week before Trump announced more tariffs, Rubin said.

A long streak of low prices

After the double-digit inflation of the 1970s was defeated in the early 1980s, inflation still regularly topped 4% yearly until the mid-1990s, when freer trade and globalization began to intensify. From 1995 through 2020, it averaged less than 2.2%.

American shoppers reaped the benefits. Average clothing costs fell 8% from 1995 through 2020, at the same time that overall prices rose 74%, according to government data. Furniture costs were roughly unchanged. The average price of shoes rose just 10%.

Trump administration officials have at times acknowledged the prospect of higher prices from the tariffs.

In a speech last month to the Economic Club of New York, Treasury Secretary Scott Bessent said, “Access to cheap goods is not the essence of the American dream.”

The administration’s willingness to downplay the allure of cheap goods is a risky move, coming after the worst inflation spike in four decades from 2021 to 2023. The jump in prices for essentials such as groceries, gas and housing soured many voters on the economy under former President Joe Biden, despite low unemployment.

According to AP VoteCast, a nationwide survey of voters last November, about half of Trump’s voters said the high price of gas, groceries and other goods was the single most important factor in their vote. Another 43% of Trump voters said it was an important factor, even if it was not the most important consideration.

Some consumers say they are willing to pay more for U.S. goods.

Alisha Sholtis, 38, a nurse-turned-social media influencer, used to shop heavily on China-founded fast-fashion e-commerce site Temu, scooping up polyester tops and dresses for $5 to $25 and grabbing cheap electronics and toys. Products from Temu will now face huge new tariffs.

Yet Sholtis, who lives in Davison, Michigan, said she got tired of the clothes that fell apart after one washing and the toys that broke easily. She now shops elsewhere.

She applauds Trump’s goal of bringing some manufacturing back to the U.S. because she feels the move will lead to better quality. And she said she wouldn’t mind paying higher prices as a result.

“I would buy less of more higher quality things,” she said.

Kevin Hassett, Trump’s top economic adviser, acknowledged Sunday that “there might be some increase in prices” from the president’s tariffs.

But he noted that there have been trade-offs from globalization: “We got the cheap goods at the grocery store, but then we had fewer jobs,” he said on ABC’s “This Week.”

Yet many industries will find it hard to shift much production back to the U.S. in the face of the tariffs, particularly since the scope of the duties has been changing frequently. With duties on Chinese goods so much higher than in the rest of the world, many Chinese products will likely be routed through other countries, such as Vietnam, and pay a lower duty, economists say.

Shannon Williams, CEO of the Home Furnishings Association, a furniture trade group, said it can take years to set up a factory in the U.S. It’s not clear if there would be enough workers either, given the low U.S. unemployment rate of 4.2%.

And the most innovative furniture makers in the U.S. are using technology to reduce their labor needs. “They’re going through it and completely automating their assembly line,” she said.

China is the United States’ third-largest trading partner, and the U.S. imported more than $60 billion worth of iPhones and other mobile phones from China last year.

China also exported 1.2 billion pairs of shoes to the United States, according to the Footwear Distributors and Retailers of America. About 26% of U.S. clothes were imported from China in 2023, one study found, and about 80% of U.S. toys.

Williams said furniture prices likely won’t rise much anytime soon because most companies now import from other Asian nations, such as Vietnam or Malaysia.

Yet “globalization has definitely helped bring costs down,” she said. “There’s a reason you could buy a $699 sofa in 1985 and buy a $699 sofa today.”

D’Innocenzio reported from New York. Associated Press Writer Linley Sanders also contributed to this report.

“We’re not waiting to make our case,” U.S. Rep. Jeff Crank said in an early morning video call with reporters. “We’re making our case and we’re doing it right now. We’re going to continue to fight — it makes sense that it be in Colorado. It’s already in Colorado.”

Crank is a freshman who represents the 5th Congressional District where Peterson Space Force Base, home to Space Command, sits. He was joined by Reps. Lauren Boebert, Gabe Evans and Jeff Hurd, who spoke from an office at the U.S. Capitol in Washington, D.C.

Members of Alabama’s congressional delegation have been spinning a different story this week, with U.S. Rep. Mike Rogers saying on a podcast that contractors are “ready to turn dirt” on a future Space Command headquarters at the Army’s Redstone Arsenal in Huntsville.

Rogers, chairman of the House Armed Services Committee, told Auburn University’s “Cyber Focus” podcast Tuesday that he expected a final decision from the Trump administration this month.

“We do expect it to be announced right after the Air Force secretary is named,” he said.

President Donald Trump in January nominated former air crewman and space expert Troy Meink to lead the Air Force. He hasn’t been confirmed to the post yet.

But Colorado’s Republicans were hopeful that no move would happen.

“I’ve asked many of our senior military leaders: What is the military value of moving Space Command out of Colorado Springs?” Crank said Thursday. “And, point blank, they say there isn’t any.”

Evans, who represents Colorado’s 8th Congressional District and is an Army veteran, said he was encouraged by the fact that Trump didn’t immediately move Space Command upon taking office nearly three months ago — as was predicted by Rogers shortly after the November election.

“There were a lot of rumors swirling that this was going to be one of those first executive orders dropped on Jan. 20,” Evans said. “As we all know, there was no executive order on Day 1 talking about Space Command.”

Space Command, which is responsible for the nation’s military operations in outer space, was revived in 2019 under Trump’s first administration. Located first in Colorado Springs, it was set to move to Alabama after Trump announced that state as his selection for a permanent headquarters in the waning days of his first administration in early 2021.

But former President Joe Biden later reversed that decision and the command remained in Colorado. The Denver Metro Chamber of Commerce estimates it supports nearly 1,400 jobs and has a $1 billion impact on the local economy.

Huntsville, home to some of the earliest missiles used in the nation’s space programs, scored higher than Colorado Springs in a Government Accountability Office assessment of potential locations for the command. That same office, however, gave the selection process low marks for documentation, credibility and impartiality and said that senior U.S. officials who were interviewed conveyed that remaining in Colorado Springs “would allow U.S. Space Command to reach full operational capability as quickly as possible.”

With rising military threats from Russia and China, Boebert said Thursday that it was “even more critical for Space Command to avoid being moved across the country.”

The minimum $2 billion price tag to relocate the command would undermine the priorities the administration has set with its budget-cutting Department of Government Efficiency office.

“It really flies in the face of the DOGE operations that are taking place,” the congresswoman said on the call.

The Republican delegation on Monday sent a letter to the White House outlining Colorado’s position on the issue. They wrote that a move to Alabama “would introduce unnecessary risks, disrupt established operations and waste valuable resources.”

The state’s Democratic members of Congress, along with both of the state’s Democratic U.S. senators, have also been vocal about keeping the Space Command in Colorado.

On Thursday’s call, Crank said that with the president’s announcement during his first week back in office of the creation of the Golden Dome missile defense system — a futuristic network of U.S. weapons in space designed to destroy ground-based missiles within seconds of launch — it’s all the more critical to keep Space Command in Colorado.

“We have to have this seamless coordination between (Colorado Springs-based) Northern Command and Space Command, especially if we’re going to be successful implementing Golden Dome,” he said. “They literally share the same parking lot at Peterson Space Force Base, so I believe there would be a great loss in capability there.”

The Associated Press contributed to this report.

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WASHINGTON (AP) — U.S. inflation declined last month as the cost of gas, airline fares, and hotel rooms fell, a sign that price growth was cooling even as President Donald Trump ramped up his tariff threats.

Consumer prices rose just 2.4% in March from a year earlier, the Labor Department said Thursday, down from 2.8% in February. That is the lowest inflation figure since September.

Excluding the volatile food and energy categories, core prices rose 2.8% compared with a year ago, down from 3.1% in February. That is the smallest increase in core prices in nearly four years. Economists closely watch core prices because they are considered a better guide to where inflation is headed.

Yet economists warned that the data is mostly backward-looking and likely to be overtaken by the impact of the tariffs that Trump has left in place, including huge duties on China, even after the 90-day pause of some tariffs announced Wednesday. Inflation should start to pick up in two to three months’ time and possibly remain elevated through at least the end of this year.

“We got a huge tariff increase,” said Paul Donovan, chief economist for UBS Wealth Management. “There was an extreme tariff increase for less than 24 hours, and we’re back to a huge tariff increase, relative to where we were a month ago. This is increasing taxes on U.S. consumers. And they’re going to have to find the money to pay these taxes.”

On a monthly basis, prices actually fell 0.1% in March, the first monthly drop in nearly five years. Core prices rose just 0.1% in March from February.

“That was nice, but don’t get used to it,” said Greg McBride, chief financial analyst at Bankrate. “All this is looking in the rearview mirror. With both inflation and the overall economy, uncertainty abounds about what might be lurking around the bend.”

Used car prices dropped 0.7% from February to March, the government said. The cost of auto insurance fell 0.8%, welcome relief for car owners, though insurance costs are still up 7.5% compared with a year ago.

One reason prices fell was sharp drops in travel-related costs, including air fares, which slipped 5.3% just from February to March. Hotel room prices dropped 3.5%. Economists said those drops in part reflected much slower international demand as the number of tourists visiting the United States has fallen sharply amid Trump’s aggressive trade policy.

Visits to the United States from overseas fell nearly 12% last month, according to government data.

The cost of groceries, however, jumped 0.5% last month, the report showed, as egg prices leapt 5.9% to a new record average price of $6.23 a dozen. Clothing prices rose 0.4%, though they have increased little in the past year.

Trump had imposed sweeping tariffs on nearly 60 nations last week, which sent financial markets into a tailspin and caused sharp drops in business and consumer sentiment. Yet on Wednesday he paused those duties for 90 days. The White House initially said a 125% tariff would remain on all imports from China, later clarifying that the tariff is 145% when a 20% hike for fentanyl tariffs are included. And 25% duties on steel, aluminum, imported cars, and many goods from China and Mexico also remain in place.

The remaining tariffs are still likely to lift inflation this year, economists say, even with the 90-day pause.

Even with the pause, many companies are still uncertain where trade policy will go next. Trump has also said that duties on pharmaceutical imports will be imposed.

Consumers will likely see some prices rise because of the existing duties, including the massive tariffs on China. The United States imports more than $60 billion of iPhones and other mobile phones every year from China, as well as massive amounts of clothes, shoes and toys.

Many U.S. companies will likely shift production out of China, a process that had already started during Trump’s first term when he slapped duties on some of its exports. Still, China remains the Unite States’ third-largest trading partner.

Shifting supply chains out of China will also likely take time and come with its own costs, which could raise prices for U.S. consumers in the coming months.

Last week, Federal Reserve Chair Jerome Powell said that the central bank was likely to keep its key interest rate unchanged at about 4.3% as it waited to see how Trump’s policies impacted the economy. Trump called for the Fed to cut rates on Friday.

“There’s a lot of waiting and seeing going on, including by us,” Powell said. “And that just seems like the right thing to do in this period of uncertainty.”

Slightly more Americans filed for unemployment benefits last week, but the labor market remains broadly healthy despite an ongoing trade war.

Jobless claim filings inched up by 4,000 to 223,000 for the week ending April 5, the Labor Department said Thursday. That’s less than the 225,000 new applications analysts forecast.

Weekly applications for jobless benefits are considered a proxy for layoffs, and have mostly ping-ponged between 200,000 and 250,000 for the past few years.

Even though President Donald Trump put a 90-day pause on most of his widespread tariff hikes Wednesday, concerns remain about a global economic slowdown that could upend what has been an incredibly resilient labor market.

Like his pledge to institute tariffs, Trump’s promise to drastically downsize the federal government workforce is fully in motion.

It’s not clear when the job cuts ordered by the Department of Government Efficiency — or “DOGE,” spearheaded by Elon Musk — will surface in the weekly layoffs data,

Federal agencies that have either announced layoffs or are planning cuts include the Department of Health and Human Services, IRS, Small Business Administration, Veterans Affairs and Department of Education.

Despite showing some signs of weakening during the past year, the labor market remains healthy with plentiful jobs and relatively few layoffs.

Last week, the government reported that U.S. employers added a surprisingly strong 228,000 jobs in March and while the unemployment rate inched up to 4.2%, that’s a healthy figure by historical standards.

Some high-profile companies have announced job cuts already this year, including Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta.

The four-week average of applications, which aims to smooth out some of the week-to-week swings, was unchanged at 223,000.

The total number of Americans receiving unemployment benefits for the week of March 29 fell by 43,000 to 1.85 million.

U.S. egg prices increased again last month to reach a new record-high of $6.23 per dozen despite President Donald Trump’s predictions, a drop in wholesale prices and no egg farms having bird flu outbreaks.

The increase reported Thursday in the Consumer Price Index means consumers and businesses that rely on eggs might not get much immediate relief. Demand for eggs is typically elevated until after Easter, which falls on April 20.

Industry experts were expecting the index to reflect a drop in retail egg prices because wholesale egg prices dropped significantly in March. University of Arkansas agricultural economist Jada Thompson said the wholesale prices did not start dropping until mid-March, so there may not have been enough time for the average price for the month to decline even though prices started to fall at the end of the month. And grocery stores may not have immediately passed on the lower prices.

The bird flu effect

Bird flu outbreaks were cited as the major cause of price spikes in January and February after more than 30 million egg-laying chickens were killed to prevent the spread of the disease. Only 2.1 million birds were slaughtered in March and none of them were on egg farms.

Egg prices hit $5.90 in February one month after setting a record at $4.95 per dozen, according to the U.S. Bureau of Labor Statistics.

The farms that had fall outbreaks have been working to resume egg production after sanitizing their barns and raising new flocks, but chickens must be about six months old before they start laying eggs. Thompson said those farms did not come back online as quickly as anticipated.

In the latest U.S. Department of Agriculture numbers, there were only about 285 million hens laying eggs nationwide as of March 1, down from 293 million the previous month. Before the outbreak, the flock typically numbered more than 315 million.

Since the current bird flu outbreak began, more than 168 million birds have been slaughtered, most of them egg-laying chickens. Any time a bird gets sick, the entire flock is killed to help keep bird flu from spreading. That can have an effect on the egg supply because massive egg farms may have millions of birds.

The disease is difficult to control because it is spread easily through the droppings of wild birds that carry the avian flu virus. Bird flu has also infected other animals, including dairy cattle and several dozen farm workers but officials maintain it is not a significant threat to humans.

Egg price politics

Trump tried to take credit for the lower wholesale egg prices the USDA reported in recent weeks.

“The egg prices they were going through the sky. And you did a fantastic job,” Trump said to Agriculture Secretary Brooke Rollins before he announced the details of his tariffs at the White House last week. ”Now we have lots of eggs and they are much cheaper now.”

But experts say the president’s plan to fight bird flu by focusing on strengthening egg farmers’ defenses against the virus is likely to be more of a long-term help.

The Agriculture Department tried to find egg imports to add to the supply and nearly 4 million dozens of eggs were brought into the country in February. But egg traders saw an opportunity with the high prices and 7.6 million dozens were exported. Numbers for March were not yet available, but the number of eggs shipped overseas is tiny compared to the 6.67 billion table eggs produced in the United States in February.

“I think there are lots of people who are looking to see the egg prices coming down because they wanted to call it a win. And I think it’s a loss for everybody. I think we all want to see egg prices come down,” Thompson said.

Trump and Vice President JD Vance both trumpeted the overall decline in inflation last month before most of Trump’s tariffs took effect, but they did not directly address egg prices.

Rollins on Thursday suggested the rise in egg prices is temporary. She pointed to the overall consumer price index showing a slight dip in prices for goods and services across the U.S. economy in March and suggested egg prices will soon follow.

“We’re also moving into the Super Bowl of eggs, which is Easter,” Rollins said. “So from the beginning, I’ve said this is sort of the high price for retail for eggs, but we feel very confident that will continue to come back down.”

Earlier this week, Trump said the annual White House egg roll would use real eggs again this year despite the high prices. Egg farmers typically donate more than 30,000 eggs for the event.

Egg prices around the country

U.S. egg prices did began falling in mid-March, according to Datasembly, a market research company that tracks prices at thousands of stores. Datasembly said eggs averaged $5.98 per dozen the week beginning March 16 and dropped to $5.51 the week beginning March 30.

But prices vary widely around the country, depending on the location of recent bird flu outbreaks and some state laws requiring eggs to be cage-free. At a Walmart in Richmond, California, a dozen eggs were $6.34 on Thursday. In Omaha, Nebraska, Walmart was selling eggs for $4.97 per dozen. California requires eggs sold to be cage-free; Nebraska doesn’t.

Egg prices are still expected to decline further later this spring, but the latest numbers could also increase scrutiny of Cal-Maine Foods, which provides 20% of the nation’s eggs, and other large egg producers.

Earlier this week, Cal-Maine acknowledged it is being investigated by the antitrust division of the U.S. Department of Justice, which is looking into egg price increases. Cal-Maine said it is cooperating with the investigation.

In its most recent quarter, which ended March 1, Cal-Maine said its net income more than tripled to $508.5 million compared to the same period a year ago. The company said its revenue nearly doubled to $1.42 billion, largely because of higher egg prices.

Faking it

The price of real eggs has some consumers turning to fake ones for Easter crafts this year. Craft retailer Michaels said its craft egg kit, which features a dozen plastic eggs for $2.49, is a top seller and has sold three times faster than the company expected.

Associated Press writer Aamer Madhani contributed to this report.

NEW YORK (AP) — U.S. stocks dove Thursday and surrendered a chunk of their historic gains from the day before as President Donald Trump’s trade war continues to threaten the economy.

The S&P 500 tumbled 3.5%, slicing into Wednesday’s surge of 9.5% following Trump’s decision to pause many of his tariffs worldwide. The Dow Jones Industrial Average dropped 1,014 points, or 2.5%, and the Nasdaq composite tumbled 4.3%.

“Trump blinks,” UBS 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 tariffs on its products to well above 100%. Even if that were to get negotiated down to something like 50%, and even if only 10% tariffs remained on other countries, Baweja said the hit to the U.S. economy could still be large enough to hurt expected growth for upcoming U.S. corporate profits.

The losses for U.S. stocks accelerated Thursday after the White House clarified that the United States will tax Chinese imports at 145%, not the 125% rate that Trump had written about in his posting on Truth Social Wednesday, once other previously announced tariffs were included. The drop for the S&P 500 exceeded 6% at one point.

“Everything is still very volatile, because with Donald Trump, you don’t know what to expect,” said Francis Lun, chief executive of Geo Securities. “This is really big uncertainty in the market. The threat of recession has not faded.”

China, meanwhile, has reached out to other countries around the world in apparent hopes of forming a united front against Trump. The world’s second-largest economy is also ramping up its own countermeasures to Trump’s tariffs.

The stock price of Warner Bros. Discovery, the company behind “A Minecraft Movie,” dropped 12.5% for one of Wall Street’s sharpest losses after China said Thursday it will “appropriately reduce the number of imported U.S. films.” The Walt Disney Co.’s stock sank 6.8%

A spokesperson for the China Film Administration said it is “inevitable” that Chinese audiences would find American films less palatable given the “wrong move by the U.S. to wantonly implement tariffs on China.”

That was after Trump and his Treasury secretary, Scott Bessent, sent a clear message to other countries Wednesday after announcing their pause on tariffs for most countries: “Do not retaliate, and you will be rewarded.”

The European Union said Thursday it will put its trade retaliation measures on hold for 90 days and leave room for a negotiated solution.

Thursday’s swings also hit the bond market, which had been showing encouraging signals earlier in the day that stress may be easing.

The bond market has historically played the role of enforcer against politicians and economic policies it deemed imprudent. It helped topple the United Kingdom’s Liz Truss in 2022, for example, whose 49 days made her Britain’s shortest-serving prime minister. James Carville, adviser to former U.S. President Bill Clinton, also famously said he’d like to be reincarnated as the bond market because of how much power it wields.

Earlier this week, big jumps for U.S. Treasury yields had rattled the market, so much that Trump said Wednesday he had been watching how investors were “getting a little queasy.”

Several reasons could have been behind the sharp, sudden rise in yields. Hedge funds may have sold Treasurys in order to raise cash, and investors outside the United States may be dumping their U.S. government bonds because of the trade war. Regardless of the reasons behind it, higher Treasury yields crank up pressure on the stock market and push rates higher for mortgages and other loans for U.S. households and businesses.

The 10-year Treasury yield had calmed following Trump’s U-turn on tariffs, dropping all the way back to 4.30% shortly after the release of a better-than-expected report on inflation Thursday morning. That’s after it had shot up to nearly 4.50% Wednesday morning from just 4.01% at the end of last week.

As Thursday progressed, though, the 10-year Treasury yield climbed once again and reached 4.40%.

It all demonstrates why many on Wall Street are preparing for more swings in markets, after the S&P 500 at one point nearly dropped into a “bear market” by almost closing 20% below its record.

Often, the market’s whipsaw moves have come not just day to day but also hour to hour. The S&P 500 still remains below where it was when Trump announced his sweeping set of tariffs last week on “Liberation Day.”

All told, the S&P 500 fell 188.85 points Thursday to 5,268.05. The Dow Jones Industrial Average dropped 1,014.79 to 39,593.66, and the Nasdaq composite sank 737.66 to 16,387.31.

In stock markets abroad, indexes rallied across Europe and Asia in their first chances to trade following Trump’s pause on many of his tariffs. Japan’s Nikkei 225 surged 9.1%, South Korea’s Kospi leaped 6.6% and Germany’s DAX returned 4.5%.

AP writers Yuri Kageyama, Matt Ott and Huizhong Wu contributed.