US stocks were extremely volatile on Monday as traders searched for any sign that President Donald Trump’s tariffs could be negotiated or halted. The S&P 500, which tracks 500 of the biggest companies in the US, ended the day down about 0.2% after a volatile trading session featuring some of the sharpest swings since the Covid-19 pandemic. US stocks opened the day in bear market territory but surged an hour later on rumors that the Trump administration might pause tariffs.
However, a White House official dismissed these rumors, calling the idea that Trump would pause tariffs “fake news.”
Despite Trump’s escalating tariff threats against China, US Treasury Secretary Scott Bessent announced the opening of negotiations with Japan and expressed optimism about future talks with other nations. Trump provided mixed signals, stating that some tariffs might be permanent while others could be negotiated. “They can both be true,” he commented, rejecting calls to delay the import taxes.
The White House has indicated that more than 50 countries have reached out to discuss trade. “I believe that sooner or later, we will be at the negotiating table,” stated European Union trade official Maroš Šefčovič, as the EU prepared to vote on its response. In the days following Trump’s announcements, stock markets in the US and the UK experienced their worst one-day falls since the beginning of the Covid pandemic in 2020.
The S&P 500 has lost more than 10% of its value over three days— a drop comparable to declines seen during the 2008 financial crisis and the early days of the pandemic. “It is frustrating for investors,” said Mike Mussio, president of FBB Capital. “This feels like an unforced error in terms of policy.”
High-profile business leaders including Jamie Dimon, Bill Ackman, and Daniel Loeb have voiced concerns amid the market turmoil.
Nevertheless, Trump has doubled down on his strategy, proposing an additional 50% tariff unless Beijing withdraws retaliatory measures.
Tariffs drive stock market volatility
This would bring the tax on Chinese goods entering the US to at least 104%, on top of the 34% tariff announced last week and the 20% imposed since January.
China’s retaliatory tariffs of 34% on US goods have amplified fears of a trade war between the two nations. Analysts warn that without global agreement, the tariffs could severely impact economies worldwide. “Fundamentally, investors are worried about a big hit to corporate profits and a massive slowdown in economic growth,” said Russ Mould, investment director at AJ Bell.
Early trading on Monday saw the S&P 500 briefly drop more than 20% since its recent peak in February, touching the milestone known as a “bear market.” However, shares surged more than 7% within minutes on a rumor that the White House might put tariffs on hold. Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, remarked on the unprecedented market volatility. “That’s enormous,” he said.
“There’s a lot of uncertainty here, and that’s what’s driving the market.”
The Dow Jones Industrial Average closed down 0.9%, while the Nasdaq ended up 0.1%. European markets also closed lower, with London’s FTSE 100 falling 4.4% to its lowest level in more than a year. Shares in Paris and Berlin similarly declined.
The concerns have affected commodity prices, with oil dropping more than 4% before recovering slightly, while copper fell roughly 3%. Gold, usually considered a “safe” investment, also saw a decline. The developments highlight investor fears over slower economic growth and the broader impacts of ongoing trade disputes.
The situation continues to evolve, with significant attention on how global leaders will navigate the complex trade landscape.
