As the tariff war escalates, stocks fall into almost rocky markets

Caroline Vallett Kevic

NEW YORK (Reuters) – The biggest major stock index ended Monday’s turbulence as US President Donald Trump showed no indications to ease the world trade war.

The European Union proposed anti-enforcement on Monday, but Trump threatened to add an additional 50% obligation to US imports from China on Wednesday if he fails to withdraw 34% retaliatory tariffs from last week.

US stocks swayed between big losses and profits throughout the session as investors digested changing headlines related to tariffs.

Stocks have fallen sharply since Trump announced swept tariffs on Wednesday that investors were worried about driving inflation and pushing the global economy into a recession.

The CBOE volatility index rose to 46.98, the closest since April 2020.

“We are committed to providing a range of services to our customers,” said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia.

“It shows just how short-lived this market defeat is.”

Traders are betting that an increased risk of a recession could encourage interest rates to be cut earlier in May. The futures market is priced at almost a five-fifth point reduction of US rates this year.

And with the US revenue reporting season beginning later this week, rising costs will put pressure on companies’ profit margins.

The White House denied reports that Trump is considering a 90-day suspension of tariffs in all countries except China. The report, which the White House called “fake news,” temporarily changed our stocks a positive turn early in the session.

Dow Jones’ industrial average fell to 349.26 points (0.91%, 0.91%, 37,965.60), while the S&P 500 fell to 11.83 points (0.23%) to 5,062.25, while Nasdaq composites went to 15.48 points (0.10%) to 15,603.26.

During the session, the S&P 500 went from a low of 4,835.04 to a high of 5,246.57.

MSCI stock gauges worldwide fell 18.81 points (2.46%) to 745.48.

European stocks have also been destroyed, and the Stoxx 600 has been closed at its lowest since January 2024. The Pan-European Stoxx 600 fell 4.5%, down in the fourth consecutive session.

The Treasury Department rose in optimism that some countries could negotiate deals with Trump to avoid tariffs.

Trump’s adviser said he was willing to negotiate with a country in a hurry to drop the 50% high tariffs for it to come into effect Wednesday. White House economic adviser Stephen Milan encouraged countries that want to escape high mutual US tariff charges to make their offer to Trump.