New York (CNN) — US stocks mostly fell after an extremely volatile day Monday — tumbling, surging and then bouncing around in every direction, as traders searched for any sign that President Donald Trump’s tariffs could be negotiated or halted.
Markets around the world had tumbled earlier in the day over concerns about how Trump’s sweeping tariffs might upend the global economy and stymie economic growth. US stocks opened the day in bear market territory but surged an hour later on rumors that the Trump administration may pause tariffs — perhaps for several months.
That rumor turned out to be just that — a White House official called any suggestion that Trump would pause tariffs “fake news.” And despite signs that some trading partners, including the EU, might be willing to negotiate with Trump, the president dashed those detente hopes when he said he could slap another 50% tariff on China.
And just like that, the Dow, which had risen nearly 900 points, was back down once again.
After a roller coaster day, the Dow closed lower by 349 points, or 0.91%. The broader S&P 500 fell 0.23%. The Nasdaq Composite was 0.1% higher after fluctuating between gains and losses.
Wall Street’s fear gauge, the Cboe Volatility Index, or VIX, on Monday closed at the highest level since the Covid pandemic as investors fretted over the market’s next move. The VIX surpassed an intraday level of 50 points midday Monday, a rare level associated with extreme volatility.
The wild swings in markets underscore just how badly investors want Trump to put a pause on his trade war. US stocks surged off their lows on rumors of a pause on tariffs. However, that rebound proved fleeting as traders realized nothing official had been announced.
“That was a good example of what would happen if we actually got some rational thought mixed in with the ignorant tariff policy,” Art Hogan, chief market strategist at B. Riley Wealth Management, told CNN in a phone interview Monday. “The stock market vigilantes have spoken loudly that we need rational thought mixed in with this trade policy. And there is none so far.”
Hogan added that oversold markets desperate for good news are subject to wild swings that can quickly reverse.
The S&P 500 hit its low of the day at 9:43 a.m. ET and then surged on the rumor that Trump might pause tariffs, hitting its highest level of the day at 10:17 a.m. ET. In the span of just over 30 minutes, the S&P 500 surged 8.5%, a massive swing in markets. The benchmark index then shed its gains as the market came back down.
“That was a monster move off the low,” Joe Saluzzi, partner and co-founder of Themis Trading, told CNN.
One of the positive swings Monday came when Ursula von der Leyen, a top European Union official, said the bloc is “ready to negotiate” with the United States, noting that it has offered to scrap tariffs on US industrial goods.
But Trump told reporters in the Oval Office Monday afternoon that he is “not looking” at implementing a pause in enforcing the tariffs that he announced last week.
“Well, we’re not looking at that. We have many, many countries that are coming to negotiate deals with us,” Trump said. “And they’re going to be fair deals. And certain cases, they’re going to be paying substantial tariffs. They’ll be fair deals.”
The volatility in markets went beyond just stocks. The yield on the 10-year Treasury note, which had slid below 4% at the end of last week, rose to 4.155% as investors sold off bonds. Yields and bond prices trade in opposite directions.
Flirting with a bear
At the open, the S&P 500 tumbled into bear market territory — a decline of 20% from its recent peak — before pulling back. The volatility in US stocks came after a historic rout in Asia and massive losses in Europe.
Wall Street is coming off a rout in US stocks Thursday and Friday that saw the Nasdaq confirm it was in a bear market. Investors may be sensing a buying opportunity. With all the recent and rapid selling, stocks are getting cheap. Some stocks are trading at a historically inexpensive multiple of 15 times future earnings projections, according to James Demmert, chief investment officer at Main Street Research. That could help markets rebound if investors believe stocks are oversold.
“We are getting close to a bottom,” said Demmert. “The fact that stocks have dropped so significantly in these deep intraday moves is a clear sign of indiscriminate and fear-based selling. When this happens, we tend to soon see significant rallies.”
That could also muddy the message Wall Street has been trying to send to President Donald Trump. Market mayhem has potentially opened the door to some negotiation.
If the stock market pulls back from its extensive declines, Trump may get the message that he can hold firm and weather the market storm, some market analysts said.
”We need this market to crash — to keep the pressure on the administration,” Ed Yardeni, president of Yardeni Research, told CNN in a stunning comment from a prominent market analyst.
Yardeni noted to clients earlier in the day that “Liberation Day” has been followed by “Annihilation Days” in the stock market.
World leaders discuss approach to tariffs
As markets whipsawed Monday morning, Trump said in a social media post that he’s ready to slap new 50% tariffs on China following Beijing’s retaliatory duties announced last week, further escalating the global trade war that has rattled markets.
Trump said the additional tariffs would take effect midweek if China doesn’t remove its 34% retaliatory tariff by Tuesday. He also said meetings China had requested would be cancelled, though he said other countries would begin negotiating on trade immediately.
Across the Atlantic, von der Leyen, president of the EU’s executive arm, said the bloc was ready negotiate and offered to scrap its tariffs on industrial goods. Von der Leyen said the zero-tariff offer was made “long before” Trump’s latest tariff announcement and “repeatedly, for example, in the automotive sector.” She stressed that the EU has long gone “zero for zero with other countries that also have a strong automotive sector.”
At the same time, the EU is willing to play hardball: Although it would prefer to strike a “negotiated settlement,” the bloc is also “preparing a potential list (of US imports) for retaliation,” von der Leyen told reporters in Brussels.
CNN’s Fear and Greed Index slumped to its lowest level this year as tariff anxiety roiled Wall Street.
As stocks initially wavered Monday morning, Trump posted on social media that, “Countries from all over the World are talking to us.”
Trump said, “Tough but fair parameters are being set,” and mentioned that he spoke with Japanese Prime Minister Shigeru Ishiba.
Ishiba urged Trump in a call on Monday to reconsider the tariffs he imposed on Japan, according to a press statement from his office.
Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will lead United States negotiation with Japan on trade, Bessent announced on social media on Monday.
Trump, for his part, has also tried to make the case that recession fears could be a good thing. For example, US oil prices plunged below $60 for the first time since April 2021 on fears that global demand will be sapped in an economic downturn. And Treasury yields have fallen as investors have poured money into the apparent safety of government bonds. That could lower some consumer rates pegged to Treasury yields, including mortgages, credit cards and auto loans – although Federal Reserve Chair Jerome Powell said Friday the central bank was in no rush to lower rates.
“Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place,” Trump said in a social media post Monday morning.
Tariff uncertainty roils global markets
Trump and his tariffs have taken a bull stock market and are on the cusp of turning it into a bear faster than any president has overseen in modern history.
It’s not just US markets that are taking a hit from Trump’s tariffs. Stocks around the world have declined as Trump’s tariffs rattle markets. Europe’s benchmark STOXX 600 index sank 4.5% on Monday. London’s benchmark FTSE 100 index dropped 4.38%. Germany’s DAX index sank 4.13%. Italy’s benchmark stock index tumbled 5.18%.
In Asia, Japan’s Nikkei 225 index plunged 7.83%. Hong Kong’s Hang Sang index plummeted 13.22%, its worst single trading day since 1997. Taiwan’s benchmark index sank 9.7%. The Shanghai Composite index fell 7.34% and the Shenzhen Composite index sank 9.66%.
Among the reasons for the bearish sentiment is the uncertainty the Trump administration has created regarding its inconsistent messaging about whether tariffs would be open to negotiation.
On Wednesday, America will impose significantly higher “reciprocal” tariffs on dozens of countries that have the highest trade imbalances with the United States. In a note to investors Sunday, Goldman Sachs said that if Trump followed through with those threats, it would surely plunge the US and global economies into a recession. JPMorgan CEO Jamie Dimon said in an annual letter to shareholders Monday that Trump’s tariffs would raise prices and slow economic growth.
In addition to baseline 10% universal tariffs that went into effect Saturday morning, Trump has also put in place tariffs on autos, steel and aluminum. He placed 25% tariffs on certain goods from Canada and Mexico. And more tariffs could be on their way: Tariffs on auto parts are set to go into effect no later than May 3. Meanwhile Trump has also threatened tariffs on lumber, pharmaceuticals, copper and microchips, among other products.
Whether or not Trump follows through with those threats could be the determining factor in whether the economy plunges into a global downturn.
If you ask Commerce Secretary Howard Lutnick, Trump isn’t bluffing.
“The tariffs are coming. (Trump) announced it, and he wasn’t kidding,” Lutnick told CBS’s “Face the Nation” on Sunday. “The tariffs are coming. Of course they are.”
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