Wall Street weathered another chaotic day of trading on Monday, with false reports about a potential tariff reprieve briefly sending stocks higher before the White House rebuffed the idea and brought the prospects of a severe economic downturn back to the forefront.
The S&P 500 swung from a loss of as much as 4.7 percent, to a gain of as much as 3.4 percent in morning trading, the biggest intraday swing for the S&P 500 since March 2020 and the Covid-19 pandemic. Volatility surged. The CBOE Vix Volatility index, known as Wall Street’s fear gauge, also rose to levels last seen during the pandemic-induced sell-off in March 2020.
The S&P 500 ended the day with a drop of 0.2 percent and 17.6 percent below its February peak. The index is on the precipice of a bear market — a rare marker of extreme market pessimism when stocks fall 20 percent from their peak.
The overarching concern for investors hasn’t changed. They are worried that steep tariffs imposed by the United States on huge swaths of imports, and the tit-for-tat response from China and other countries, will sink global growth and fuel inflation. Analysts noted that the cause of Monday’s brief rally — a false report that President Trump is considering delaying the new tariffs — showed just how desperate investors are for any sign that the White House is hearing their concerns.
And it means turmoil in the markets won’t end any time soon, said Edward Yardeni, an independent Wall Street economist.
“This one is likely to last a while given the intransigence of the Trump administration on the issue of tariffs,” he said. “The stock market clearly believes this is a disastrous policy.”
Asked earlier in the day about the possibility of a ninety day pause on the expansive tariffs announced by Mr. Trump last week, Kevin Hassett, the director of the National Economic Council, said on Fox News: “I think the president is going to decide what the president is going to decide.”
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