Wall Street slides as Trump digs in on tariffs; Dow, S&P fall over 2%

Donald Trump threatens additional tariffs on China

Pranav Kashyap and Purvi Agarwal

 

US stock indexes resumed their slide in afternoon trading on Monday as investors retreated for the third day after President Donald Trump dug in on tariffs and warned he could further increase the levies on China.

 

US stocks have been hammered by the Trump administration's plans to impose sweeping tariffs on all imports into the United States as well as more levies on some major trading partners, fueling concerns about an economic slowdown and rising inflationary pressures.

 

All three major US indexes were at more than one-year lows on Monday. The CBOE Volatility index, seen as Wall Street's fear gauge, rose to 48.49 points, its highest since August 2024.

 

 

"The market sleepwalked into this because they felt that Trump would care about the stock market ... they felt this was only a bargaining tool. The market is now having to rethink," said Bhanu Baweja, chief strategist with UBS.

 

"There could be a material, serious hit to EPS growth." Technology stocks remained at the forefront of the selloff.

 

Apple fell 5.4%, while Microsoft dropped 1.7% and Tesla was down 5.2%, weighing on the main indexes.

 

The slide came after markets were whiplashed earlier in the trading session. At one point stocks, which had opened in the red, suddenly reversed course and rallied after a report said Trump was considering a 90-day pause on tariffs.

 

But White House officials quickly denied the report, sending the market back in the red.

 

CNBC, which in an on-screen chyron had cited White House economic adviser Kevin Hassett for the pause, subsequently reported the White House denials.

 

"As we were chasing the news of the market moves in real time, we aired unconfirmed information in a banner. Our reporters quickly made a correction on air," a CNBC spokesperson said.

 

Reuters also published the report about Hassett's comment with attribution to CNBC. In one version, Reuters failed to credit the broadcaster and later withdrew that report.

 

At 12:58 p.m. the Dow Jones Industrial Average fell 971.07 points, or 2.52%, to 37,343.79, the S&P 500 lost 102.46 points, or 2.02%, to 4,971.62, and the Nasdaq Composite lost 284.62 points, or 1.83%, to 15,303.17.

 

The S&P 500 fell 20% from its February record closing high.

 

If the index ends down 20% from its all-time closing high, it would confirm the index has been in a bear market since February.

 

In the two days following Trump's Wednesday tariff announcement, the benchmark S&P 500 index fell 10.5% and lost about $5 trillion in market value. It was the biggest two-day loss since March 2020.

 

The blue-chip Dow is down nearly 17% from its December all-time high, while the Nasdaq last week confirmed it had been in a bear market.

 

Several speeches by Federal Reserve officials and a series of economic indicators, including consumer price data, are expected this week, with markets keenly observing any signals of recessionary fears.

 

Declining issues outnumbered advancers for an 8.37-to-1 ratio on the NYSE and a 4.42-to-1 ratio on the Nasdaq.

 

The S&P 500 posted no new 52-week high and 167 new lows, while the Nasdaq Composite recorded eight new highs and 973 new lows.

 

(Reporting by Pranav Kashyap, Sruthi Shankar and Purvi Agarwal in Bengaluru; Additional reporting by Libby George in London; Editing by Arun Koyyur and Shounak Dasgupta)