U.S. stocks took a nosedive Monday after President Donald Trump doubled down on his aggressive tariff policies. Investors had hoped for relief, but instead, markets plunged into turmoil.
The S&P 500 dropped 1.4% by midday, extending losses from its worst week since the COVID crash of March 2020. The index, a key benchmark for retirement accounts, has now shed nearly 20% of its value since its peak less than two months ago.
Meanwhile, the Dow Jones Industrial Average tumbled 744 points, or 1.9%, while the Nasdaq slid 1.1%. The morning saw wild swings, with the Dow briefly plummeting 1,700 points before rocketing up 900—only to slide back down. At one point, the S&P 500 swung from a 4.7% loss to a 3.4% gain, marking one of its most volatile sessions in years.
Rumors and Reality Collide: Trump Threatens China
The chaos intensified after a White House post on X dismissed rumors of a 90-day tariff pause as “fake news.” The mere suggestion of relief had briefly buoyed markets, proving how desperate investors are for a reprieve.
But within an hour, Trump escalated tensions further, threatening even steeper tariffs on China after Beijing retaliated with its own import taxes. The move stunned Wall Street, signaling that the president may not back down despite market pain.
On Sunday, Trump told reporters he doesn’t want markets to fall—but he also shrugged off concerns. “Sometimes you have to take medicine to fix something,” he said aboard Air Force One.
Global Markets in Freefall
The fallout wasn’t limited to the U.S. Hong Kong’s stock market cratered 13.2%, its worst day since 1997.
JPMorgan CEO Jamie Dimon warned in a shareholder letter that Trump’s tariffs could fuel inflation and raise recession risks. “It will slow down growth,” he wrote, echoing concerns from other top executives.
Fed Faces Tough Choices
The turmoil puts the Federal Reserve in a bind. Historically, the central bank has slashed rates to rescue markets—but this time, inflation complicates matters. With prices already rising, further stimulus could overheat the economy.
“Uncertainty about these tariffs is driving the sell-off,” said Rintaro Nishimura of the Asia Group. If the S&P 500 closes 20% below its record, it would officially enter a bear market—a grim milestone signaling deeper trouble ahead.
MAGA Movement Splinters Over Tariffs
Trump’s trade war is also dividing his allies. Tesla CEO Elon Musk clashed with Trump adviser Peter Navarro, mocking his Harvard background and pushing for zero tariffs with Europe. Navarro fired back, calling Musk “just a car salesman” acting in self-interest.
Conservative voices like Ben Shapiro labeled the tariffs “crazy,” while billionaire Bill Ackman warned of an “economic nuclear winter.” Even GOP senators, including Ted Cruz, voiced concerns, calling tariffs a “tax on consumers.”
Trump Digs In
Despite the backlash, Trump remains defiant. “Don’t be weak. Don’t be stupid,” he posted on Truth Social. “Be courageous, and GREATNESS will follow!”
For now, the Trump Tariffs stand—and so does the market’s panic. With no clear end in sight, investors brace for more turbulence ahead.
