In New York, markets experienced significant volatility on Monday, propelled by growing anticipation around President Donald Trump’s imminent “Liberation Day.” The S&P 500 exhibited a roller-coaster pattern, increasing by 0.6% following a mid-morning dip of 1.7%. This movement somewhat softened the index’s loss for the first quarter to 4.6%, marking the most significant quarterly loss in two-and-a-half years.
The Dow Jones Industrial Average also reversed its course post-initial losses, climbing 417 points or 1%. However, Big Tech giants like Tesla and Nvidia struggled, pulling the Nasdaq composite slightly down by 0.1%. Such volatility has become familiar for the U.S. stock market amid uncertainties regarding Trump’s tariff plans and potential inflationary and economic impacts.
Globally, concerns over tariffs meant to boost U.S. manufacturing jobs led to sell-offs. Japan saw the Nikkei 225 plunge 4%, South Korea’s Kospi 3%, and France’s CAC 40 dropped 1.6%. Conversely, traditional safe havens like gold and Treasury bonds saw increases: gold briefly peaked at $3,160 per ounce, and the 10-year Treasury yield decreased from 4.27% to 4.21%.
As the U.S. prepares for what Trump terms “reciprocal” tariffs, aiming to balance perceived burdens with other countries through measures like value-added taxes, the specifics of “Liberation Day” remain unclear. Economists at Goldman Sachs anticipate Trump announcing a 15% average tariff. They have adjusted their inflation expectations upwards while lowering their growth forecasts, pegging the chance of a recession at 35% due to declining growth, confidence, and potential White House tolerance for economic strain.
A milder-than-expected tariff imposition might spur a market rally, while harsher outcomes could fuel deeper declines, resulting in potential workforce reductions. However, some experts suggest April 2 could merely spark further negotiations rather than resolve market uncertainties.
Trump’s tariff plans, even if softened, could still stall U.S. spending due to the uncertainty they introduce. A robust economy from last year could falter if households and businesses curb their expenditures.
Monday’s market saw familiar faces bearing the brunt of the instability. Tesla fell by 1.7%, with its 2023 losses at 35.8%, partly due to worries over its strong link to CEO Elon Musk amid political tensions and ensuing protests. Nvidia also saw a 1.2% dip, bringing its year-to-date decline to 19.3%, as critics view Big Tech stock prices as overly inflated.
On a positive note, Mr. Cooper soared 14.5% after announcing a $9.4 billion acquisition by mortgage company Rocket, although the deal caused Rocket’s stock to drop by 7.4%. Warren Buffett’s Berkshire Hathaway climbed 1.2%, reflecting its heavy cash reserves, perceived as a sign of limited buying interest in an overpriced market.
Newsmax experienced a historic surge, climbing 735% on its trading debut, with its stock’s instability leading to temporary halts throughout the day.
By closing, the S&P 500 rose to 5,611.85 with a 30.91-point increase. The Dow Jones escalated by 417.86 to reach 42,001.76, while the Nasdaq composite decreased by 23.70 to settle at 17,299.29.