The U.S. stock market experienced significant volatility on Monday as investors reacted to President Donald Trump’s steadfast stance on tariffs. The Dow Jones Industrial Average initially fell 1,320 points, or 3.4%, shortly after markets opened, while the S&P 500 and tech-heavy Nasdaq dropped 3.9% and 4.2%, respectively. In a turbulent trading session, all three indexes saw massive gains following an unsubstantiated claim on social media suggesting the White House would pause the tariffs for 90 days.
However, the gains were short-lived as the Trump administration announced it had no plans to pause the tariffs. The losses since Trump’s “Liberation Day” announcement on Wednesday have been staggering, with the Dow down 10%, or almost 4,300 points, and the S&P 500 and Nasdaq down 11% each. Wall Street is increasingly alarmed by the potential fallout from Trump’s tariffs.
Goldman Sachs economists projected a recession if the White House maintains the announced tariff rates, and Jamie Dimon, CEO of JPMorgan Chase, warned shareholders on Monday that the “recent tariffs will likely increase inflation.”
The CBOE Volatility Index (VIX) closed at its highest level since April 2, 2020, when the stock market briefly collapsed amid stay-at-home orders during the COVID-19 pandemic.
Markets quake amid Trump tariffs
The VIX surged on a day in which the S&P 500 swung between being up as much as 3.4% and down as much as 4.7%.
Trump showed no signs of backing down on tariffs, instead suggesting the Federal Reserve should cut rates and falsely claiming, “there is NO INFLATION.” He warned on his Truth Social platform, “Don’t be Weak!”
Bhanu Baweja, UBS Investment Bank’s chief strategist, referred to the situation as a “manmade problem, concentrated really around one man.” Baweja added, “If that one person changes his mind, suddenly the whole algebra changes.”
Big technology stocks, already battered last week, tanked early Monday. Shares of iPhone maker Apple fell 4%, and Elon Musk’s Tesla dropped 3% after losing about 15% between Thursday and Friday. The S&P 500 entered bear market territory on Monday as it fell more than 20% below its February peak before trimming to an 18% decline.
The Dow is not far behind, down 16% from its December all-time high, while the Nasdaq is 23% below its December peak. Stocks also tumbled in Europe and Asia, with Europe’s Stoxx 600 and the U.K.’s FTSE 100 indexes dropping 4% each. China’s CSI 300 and Japan’s Nikkei 225 indexes fell 7% and 8%, respectively.
Image Credits: Photo by Ruben Sukatendel on Unsplash
