U.S. stocks are falling in a manic Monday after President Donald Trump doubled down on his tariffs, despite seeing how much financial markets would love to see him do the opposite.
The S&P 500 was down 1.4% in midday trading, coming off its worst week since COVID began crashing the global economy in March 2020. The index, which sits at the heart of many investors’ 401(k) accounts, has lost nearly 20% since setting a record less than two months ago.
The Dow Jones Industrial Average was down 744 points, or 1.9%, as of noon Eastern time, and the Nasdaq composite was 1.1% lower.
Earlier in a heart-racing morning, the Dow fell as many as 1,700 points shortly after trading began, following even worse losses worldwide on worries that Trump’s tariffs could torpedo the global economy. But it suddenly surged to a leap of nearly 900 points before pulling back lower. The S&P 500 at one point went from a loss of 4.7% to a gain of 3.4%, which would have been its biggest jump in years.
The whipsaw swings shook the market as a White House account on X said a rumor circulating that Trump was considering a 90-day pause on his tariffs was “fake news.” That a rumor could move trillions of dollars’ worth of investments shows how hard investors are straining to see hopes that Trump may let up on his stiff tariffs, which have started a global trade war.
Within less than an hour of that “fake news” announcement, though, Trump threatened to raise tariffs further against China after the world’s second-largest economy retaliated last week with its own set of tariffs on U.S. products.
It’s all a slap in the face to Wall Street, not just because of the sharp losses it’s taking, but because it suggests Trump may not be moved by its pain. Many professional investors had long thought that a president who used to crow about records reached under his watch would pull back on policies if they sent the Dow reeling.
On Sunday Trump told reporters aboard Air Force One that he does not want markets to fall. But he also said he wasn’t concerned about a sell-off, saying “sometimes you have to take medicine to fix something.”
Trump has given several reasons for his stiff tariffs, including to bring manufacturing jobs back to the United States, which is a process that could take years. Trump on Sunday said he wanted to bring down the numbers for how much more the United States imports from other countries versus how much it sends to them.
“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” JPMorgan CEO Jamie Dimon wrote in his annual letter to shareholders Monday. He’s one of the most influential executives on Wall Street. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
The financial pain once again hammered investments around the world. Stocks in Hong Kong plunged 13.2% for their worst day since 1997. A barrel of benchmark U.S. crude oil briefly dropped below $60 for the first time since 2021, hurt by worries that a global economy weakened by trade barriers will burn less fuel. Bitcoin sank below $79,000, down from its record above $100,000 set in January, after holding steadier than other markets last week.
Trump’s tariffs are an attack on the globalization that’s remade the world’s economy, which helped bring down prices for products on the shelves of U.S. stores but also caused production jobs to leave for other countries.
It also adds pressure on the Federal Reserve. Investors have become nearly conditioned to expect the central bank to swoop in as a hero during downturns. By slashing interest rates to make borrowing easier for U.S. households and companies, along with other more untraditional moves to juice the economy, the Fed helped the U.S. economy recover from the 2008 financial crisis, the 2020 COVID crash and other bear markets.
But the Fed may have less freedom to act this time around because the conditions are so much different. For one, instead of a coronavirus or a system built up on too much belief that U.S. home prices would keep rising, this market downturn is mostly because of economic policy from the White House.
Perhaps more importantly, inflation is also higher at the moment than the Fed would like. And while lower interest rates can goose the economy, they can also put upward pressure on inflation. Expectations for inflation are already swinging higher because of Trump’s tariffs, which would likely raise prices for anything imported.
“The idea that there’s so much uncertainty going forward about how these tariffs are going to play out, that’s what’s really driving this plummet in the stock prices,” said Rintaro Nishimura, an associate at the Asia Group.
If the S&P 500 finishes the day 20% below its record, it would be a big enough drop that Wall Street has a name for it. A “bear market” signifies a downturn that’s moved beyond a run-of-the-mill 10% drop, which happens every year or so, and has graduated into something more vicious.
Nathan Thooft, a senior portfolio manager at Manulife Investment Management, said more countries are likely to respond to the U.S. with retaliatory tariffs. Given the large number of countries involved, “it will take a considerable amount of time in our view to work through the various negotiations that are likely to happen.”
“Ultimately, our take is market uncertainly and volatility are likely to persist for some time,” he said.
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Kurtenbach reported from Bangkok. McHugh reported from Frankfurt, Germany. Associated Press writers Ayaka McGill, Paul Harloff, Matt Ott and Jiang Junzhe also contributed.
U.S. stocks are falling after President Donald Trump doubled down on his tariffs, despite seeing how much markets would love to see him do the opposite.
BANGKOK – Wall Street is pointing toward major losses Monday, following enormous declines last week, as fears mount that U.S. tariffs announced by President Donald Trump will slow global economic growth.
European and Asian shares are tumbling sharply, while the leading U.S. index briefly flirted with bear market territory before the opening bell.
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Oil prices sank again, briefly dipping below $60 a barrel for the first time since 2021, with more investors anticipating that a trade war will chill global economic growth.
Futures for the S&P 500 tumbled 2.7% in premarket trading Monday, while futures for the Dow Jones Industrial Average slipped 2.4%. Nasdaq futures fell 3%. All three indexes recouped some of their overnight losses, when the S&P 500 was headed toward bear market territory — defined as a fall of more than 20% from the peak. The index was off 17.4% as of the end of last week.
The massive sell-off in riskier assets at the start of the trading week follows President Trump’s announcement of sharply higher U.S. import taxes and retaliation from China that saw markets fall sharply Thursday and Friday.
Trump’s tariff strategy has long been criticized by economists, investors and business leaders, who fear that U.S. isolation will severely limit economic growth.
“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” wrote JPMorgan CEO Jamie Dimon in his annual letter to shareholders Monday. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
Tokyo’s Nikkei 225 index lost nearly 8% shortly after the market opened and futures trading for the benchmark was briefly suspended. It closed down 7.8% at 31,136.58.
European shares followed Asian markets lower, led by Germany’s DAX index, which briefly fell more than 10% at the open on the Frankfurt exchange, but recovered some ground to move down 4.8% in midday trading. In Paris, the CAC 40 shed 5.1%, while Britain’s FTSE 100 lost 4.9%.
On Friday, the worst market crisis since the COVID-19 pandemic shifted into a higher gear as the S&P 500 plummeted 6% and the Dow plunged 5.5%. The Nasdaq composite dropped 3.8%.
“There’s no sign yet that markets are finding a bottom and beginning to stabilize,” wrote Deutsche Bank analysts in a research note.
Late Sunday, Trump reiterated his resolve on his decision to introduce tariffs of 10% to 50% on goods imported into the U.S., a move seen as massively disrupting world trade and supply chains across borders. Speaking to reporters aboard Air Force One, he said he didn’t want global markets to fall, but also that he wasn’t concerned about the massive sell-offs, adding, “sometimes you have to take medicine to fix something.”
Trump posted on his Truth Social site early Monday, blaming China and other “abusing countries” for retaliating against the U.S. with additional tariffs.
Heavy selling kicked in after China on Friday matched Trump’s tariff, upping the stakes in a trade war that many fear could end in a global recession. Even a better-than-expected report on the U.S. job market, usually the economic highlight of each month, wasn’t enough to stop the slide.
“The idea that there’s so much uncertainty going forward about how these tariffs are going to play out, that’s what’s really driving this plummet in the stock prices,” said Rintaro Nishimura, an associate at the Asia Group.
Chinese markets often don’t follow global trends, but they also tumbled. Hong Kong’s Hang Seng dropped 13.2% to 19,828.30, while the Shanghai Composite index lost 7.3% to 3,096.58. In Taiwan, the Taiex plummeted 9.7%.
South Korea’s Kospi lost 5.6% to 2,328.20, while Australia’s S&P/ASX 200 lost 4.2% to 7,343.30, recovering from a loss of more than 6%.
Asian economies are heavily exposed to Trump’s tariffs since they are dependent on exports, and a large share go to the United States.
“Beyond the market meltdown, the bigger concern is the impact and potential crises for small and trade-dependent economies, so it’s crucial to see whether Trump will reach deals with most countries soon, at least partially,” said Gary Ng of Nataxis.
U.S. benchmark crude fell $1.57 to $60.42 per barrel. Brent crude, the international standard, gave up $1.53 to $64.05 a barrel. As with the larger sell-off, the drop was fueled by fears that the tariffs would slow economic growth. That would hit demand for fuel, and the drop comes after moves to increase production by the OPEC+ producers’ alliance.
Exchange rates also gyrated. The U.S. dollar fell to 146.50 Japanese yen from 146.94 yen. The yen is often viewed as a safe haven in times of turmoil. The euro rose to $1.0955.
Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, said more countries are likely to respond to the U.S. with retaliatory tariffs. Given the large number of countries involved, “it will take a considerable amount of time in our view to work through the various negotiations that are likely to happen.”
“Ultimately, our take is market uncertainly and volatility are likely to persist for some time,” he said.
The Federal Reserve could cushion the blow of tariffs on the U.S. economy by cutting interest rates. That can encourage companies and households to borrow and spend. But Fed Chair Jerome Powell said Friday that the higher tariffs could drive up expectations for inflation and lower rates could fuel still more price increases.
Much will depend on how long Trump’s tariffs stick and how other countries react. Some investors are holding onto hope he will lower the tariffs after negotiating “wins” from other countries.
Stuart Kaiser, head of U.S. equity strategy at Citi, wrote in a note to clients that earnings estimates and stock values still don’t reflect the full potential impact of the trade war. “There is ample space to the downside despite the large pullback,” he said.
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Kurtenbach reported from Bangkok. Associated Press writers Ayaka McGill, Paul Harloff, Matt Ott and Jiang Junzhe contributed.