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markets, click or type LIVE/ in a news window.)

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Indexes down: Dow 1.77%, S&P 500 2.25%, Nasdaq 2.67%

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GM, Ford downgraded by brokerages UBS, Goldman Sachs

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March CPI at 2.4% YoY vs 2.6% estimate

(Updates after markets open)

By Shashwat Chauhan and Purvi Agarwal

April 10 (Reuters) - Wall Street's main indexes fell on

Thursday, coming off a blistering rally following U.S. President

Donald Trump's move to temporarily lower the heavy tariffs on

dozens of countries.

The U-turn came less than 24 hours after the new tariffs

took effect on most trading partners, lifting the S&P 500

to its biggest single-day percentage gain since 2008 on

Wednesday. The Nasdaq posted its biggest one-day jump

since 2001.

Trump also announced a 90-day pause on many of his new

reciprocal tariffs, but raised them to 125% on Chinese imports

from 104%. Beijing had slapped 84% tariffs on U.S. imports to

match Trump's earlier levy.

The European Union said it had agreed on a 90-day pause on

counter tariffs on U.S. goods, which were due on April 15.

At 09:35 a.m. the Dow Jones Industrial Average fell

718.88 points, or 1.77%, to 39,889.57, the S&P 500 lost

122.54 points, or 2.25%, to 5,334.36 and the Nasdaq Composite

lost 457.83 points, or 2.67%, to 16,667.14.

Most S&P 500 sectors were in the red. Information technology

and energy led the losses, falling 3.5% and

3.9%, respectively. Consumer staples was the only

sector that saw gains.

Most megacap and growth stocks slid, with Tesla and

Nvidia ( NVDA ) down more than 4% each.

The CBOE Volatility Index - seen as Wall Street's

"fear gauge" - fell from its August highs, but was last up at

36.17 points. The small-cap Russell 2000 was down 2.9%.

Meanwhile, data showed the consumer price index unexpectedly

dipped 0.1% in March, in line with estimates and advanced 2.4%

in the 12 months through March, compared with expectations of a

2.6% climb, according to economists polled by Reuters.

"We remain circumspect regarding the current inflation data,

as these figures are reflective of a period prior to the

implementation of recent tariffs," said Dan Siluk, portfolio

manager at Janus Henderson.

"We expect more volatility from inflation reads in the

months ahead."

Traders now see nearly 90 basis points of interest-rate cuts

in 2025, according to LSEG data.

Despite Wednesday's surge, the S&P 500 and the Dow

are about 5% below levels seen before the reciprocal tariffs

were announced last week.

Meanwhile, U.S. bonds markets were sanguine after a sharp

selloff in the last session, with the yield on the 10-year note

dropping to 4.302% from its February peaks.

Automakers General Motors ( GM ) and Ford fell about

3% each after the previous session's gains. Downgrades from UBS

and Goldman Sachs on the stocks added to their declines.

Investors will keep a close watch on comments from Fed

officials who are also set to make public appearances throughout

the day.

U.S. earnings season could also offer more insights into the

health of corporate America. Big banks such as JPMorgan Chase ( JPM )

will report first-quarter results on Friday.

Declining issues outnumbered advancers by a 7.81-to-1 ratio

on the NYSE and by a 3.69-to-1 ratio on the Nasdaq.

The S&P 500 posted no new 52-week highs and no new lows

while the Nasdaq Composite recorded one new high and 17 new

lows.