Global stocks took another hit on Monday as President Donald Trump intensified his stance on tariffs, raising fears of a recession. Investors grappled with the fallout from the policy shift in a chaotic trading session, with volatility reaching levels unseen since the early days of the COVID-19 pandemic.
Key Facts
- US stocks fell further on Monday, continuing last week’s heavy losses that erased trillions in market value.
- The Dow Jones Industrial Average dropped 350 points (0.9%), the S&P 500 slipped 0.2%, while the Nasdaq edged up 0.1%.
- At market open, losses were more dramatic: Dow fell 1,320 points (3.4%), S&P 500 dropped 3.9%, and Nasdaq lost 4.2%.
- A brief rally occurred after unconfirmed reports suggested a temporary tariff suspension, pushing the S&P 500 up 6%, but stocks tumbled again after the White House dismissed the claim.
- Since Trump’s “Liberation Day” speech on Wednesday, the Dow has fallen 10% (4,300 points), and both the S&P 500 and Nasdaq have each dropped 11%.
- Goldman Sachs warned of a possible recession if tariffs remain, while JPMorgan Chase CEO Jamie Dimon cautioned that tariffs could drive inflation even higher.
Volatility Hits Pandemic-Era Highs
The CBOE Volatility Index (VIX)—a key measure of market uncertainty—closed at its highest level since April 2020, when stocks collapsed due to pandemic lockdowns. The VIX surged as S&P 500 swings widened between gains of 3.4% and losses of 4.7%.
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Trump Pushes For Fed Rate Cuts
Despite market turmoil, Trump remained steadfast on tariffs. On Truth Social, he urged the Federal Reserve to cut interest rates, falsely claiming, “There is no inflation.”
Economists widely agree that tariffs will worsen inflation, which already exceeds the Fed’s 2% target. The Federal Reserve held a closed-door meeting on Monday to discuss the situation.
Trump appeared unfazed by the stock crash, even sharing a post claiming he was intentionally triggering it.
Bear Market Watch
A bear market occurs when a stock index falls 20% or more from a recent high. Before these tariff-driven declines, the last bear market occurred in 2022, when inflation soared to a 40-year high, prompting aggressive rate hikes by the Federal Reserve.
Biggest Stock Losers From Tariffs
Tech giants suffered major blows on Monday:
- Apple fell 4%, adding to last week’s 15% decline.
- Tesla dropped 3%, also down 15% since Thursday.
S&P 500 On The Edge Of A Bear Market
- Nasdaq officially entered a bear market on Friday.
- S&P 500 briefly fell over 20% from its February peak before paring losses to 18%.
- Dow Jones is down 16% from its December record high, while the Nasdaq is down 23% from its peak.
Looking Ahead
With markets in turmoil and inflation concerns mounting, all eyes remain on the White House and the Federal Reserve as investors brace for more uncertainty in the weeks ahead.
