US stocks take wild ride as Trump threatens China with more tariffs

US stocks went on a wild ride Monday as Wall Street scrambled to digest an avalanche of headlines about President Trump’s trade policies.

Over the weekend, the president signaled his so-called “reciprocal” tariffs won’t be revoked anytime soon – sending the Dow Jones Industrial Average tumbling 1,300 points after the opening bell. 

Mid-morning reports about a possible 90-day pause on the tariffs, however, sent the shares spiking into positive territory – only to crash again after the White House called it “fake news.”

As Monday’s close neared, the Nasdaq 100 jumped 0.4% after Treasury Secretary Scott Bessent announced that he will spearhead upcoming trade negotiations with Japan, following direct instructions from President Trump.

In a post on X, Bessent stated that Trump requested both himself and the US trade representative to “open negotiations” with Japanese Prime Minister Shigeru Ishiba and his administration, indicating the hefty tariffs on Japan could be negotiated lower.

Meanwhile, however, President Trump revealed in the afternoon that he he planned to add an additional 50% tariff on China starting Wednesday if the country doesn’t withdraw its retaliatory tariff increase on the US.

At the closing bell, the Dow ended up off its lows but slid 349 points, or 0.9%, at 37,966. That’s after the blue-chip index lost nearly 4,000 points in just two days last week.

The S&P 500 was down 0.2%, after earlier dipping into bear market territory as some investors warned it could be the new “Black Monday,” a reference to the index’s 26.4% drop over a three-day rout in October 1987.

The tech-heavy Nasdaq actually finished in the green, gaining 15.5 points, or 0.1%

“The uncertainty of trading partner retaliation is still weighing on the markets,” Richard Saperstein, chief investment officer at Treasury Partners, wrote in a note.

“Markets won’t rebound until tariffs are negotiated and reduced, until valuations move even lower to very compelling levels, and until fundamentals improve and none of these factors are in the cards at this time,” he added.

Investors had been hoping for foreign nations to rush to the negotiating table so the US could avoid the impact from Trump’s latest hefty tariffs — including a 10% baseline tax on all imports and much harsher rates on many nations — which economists have warned could reheat inflation.

But Trump over the weekend, when asked about the global market rout, said “sometimes you have to take medicine to fix something.”

Banks like JPMorgan and Goldman Sachs have been quick to hike their odds of a recession, to 60% and 45%, respectively.

Meanwhile, threats of retaliation from foreign nations continued to spook investors, especially after China led the way, slapping a 34% retaliatory tax on the US on Friday.

China’s new levies would hit US companies like Coca-Cola, which has lots of manufacturing and bottlers at home, especially hard, according to analysts.

The European Union is plotting its own response after Trump last week unveiled a 20% tariff on imports from the 27-nation bloc.

Over the past few weeks, EU officials have been working on an expansive list of tariffs they plan to impose on April 15. They are expected to vote on the list on Wednesday, EU officials told The New York Times.

The retaliatory tariffs will be enacted in stages – first responding to Trump’s taxes on steel and aluminum imports, then his car import duties and finally the 20% levy, according to the Times.

The EU and US’ trade relationship requires a “fresh approach,” Marcos Sefcovic, the bloc’s trade commissioner, said in a social media post on Friday.

“The EU’s committed to meaningful negotiations but also prepared to defend our interests,” he added.

Other nations slapped with harsh rates from Trump appear to be rushing to negotiate before the tariffs take effect – with the 10% taxes taking hold over the weekend and the higher rates set for Wednesday.

The president on Friday said he had a “very productive call” with a top Vietnamese official.

That helped shares in Nike, Adidas and Puma enjoy a slight rebound, since the Southeast Asian nation is a major manufacturing hub for shoemakers, and its imports are set for a massive 46% levy under the Trump administration’s new plan.

But the talks only proved that negotiations could continue to stoke volatility in the markets.

A top Vietnamese official over the weekend said the nation is “ready” to axe all its US import tariffs – but White House trade advisor Peter Navarro on Monday said the offer is not enough to delay the new taxes. His comments sent shares in all three sneaker brands back on a decline on Monday.