Stocks took a roller coaster ride Monday as surprisingly hawkish signals from President Trump on tariffs rattled Wall Street.
Trump on Sunday signaled he plans to impose wide-ranging reciprocal tariffs affecting all US trading partners worldwide — contradicting a more selective approach that was signaled by White House officials last week.
“You’d start with all countries,” Trump told reporters aboard Air Force One late Sunday — though he added that the tariffs would be more generous than trade partners had been to the US. Earlier in the day, Trump had said he “couldn’t care less” if foreign automakers raised prices because of a planned 25% import levy.
The technology-focused Nasdaq Composite recorded the day’s most significant losses, declining more than 2% and reaching its lowest point in half a year before recovering to end the session off just 0.1%.
“The uncertainty over the tariff policy is more of a problem for markets than the tariffs themselves,” David Bahnsen, chief investment officer of Manhattan-based Bahnsen Group, which boasts $7.1 billion in assets, told The Post.
“Stocks are moving lower on the uncertainty over tariffs, and the realization that the April 2 ‘Liberation Day’ may not provide more clarity.”
At the start of trading, the broader S&P 500 index lost more than 1% — falling 60 points to hit its lowest level since September — while the Dow Jones Industrial Average experienced a more modest decline of about 0.4%.
Later in the day, however, the Dow was in positive territory, gaining more than 400 points at the session’s close. The S&P also rebounded — ending the session 0.6% higher.
The rebound was likely the result of buyers taking advantage of dips and hedging that Wednesday’s “Liberation Day” for imposing US tariffs might not be as bad as investors thought, said Ken Mahoney, chief executive of Mahoney Asset Management.
“It is still tentative, and we know one day doesn’t make a market,” Mahoney told The Post. “The gap down this morning, though, after Friday’s rout, was a gift, and gave bargain hunters some good opportunities.”
The prospect of an all-out trade war as well as declining consumer and business confidence prompted Goldman Sachs on Monday to raise its 12-month recession odds to 35%, up from 20%.
The firm also raised its inflation outlook and projects three interest rate cuts in 2025. Goldman trimmed its 2025 GDP growth estimate to 1% and revised its year-end unemployment forecast to 4.5%.
It also lifted its year-end inflation forecast to 3.5%, based on annual gains in the core personal consumption expenditures (PCE) price index, a metric the Fed closely watches.
Other Wall Street analysts are issuing similar warnings. Earlier this month, economists at JPMorgan assigned a 40% chance of a recession.
Leading technology companies were especially hard hit on Monday.
Shares of Nvidia, the maker of chips used to power artificial intelligence, tumbled more than 5% during the early session before closing down 1.2%. while Tesla, whose stock hit record highs of more than $430 per share following the Nov. 5 election, saw declines exceeding 5% before ending the day down 1.7%.
Amid rising volatility and uncertainty in equities, investors sought refuge in safer assets like gold.
Consequently, gold prices surged past the significant $3,100-per-ounce threshold for the first time, trading around $3,147, driven by heightened demand for risk-off investments.
The previous week marked the fifth decline in the past six weeks for both the Nasdaq and the S&P 500.
Markets remain vigilant, closely scrutinizing economic data to gauge potential vulnerabilities.
Recent fears intensified following unexpectedly strong figures in core PCE inflation, a key indicator closely watched by the Federal Reserve.
“Stock markets are generally adverse to tariffs because most of their tax burden falls on the domestic economy, contrary to the White House’s claims,” Dr. Phillip Magness, senior fellow at the libertarian-leaning Independent Institute told The Post.
“But those same markets especially abhor uncertainty, including tariff uncertainty that affects international supply chains and raw material costs on goods such as steel and aluminum.”
Magness said that Trump’s “chaotic approach to imposing tariffs has produced the see-saw effect that we’ve seen on Wall Street for the last two months, particularly as the president has vacillated between conflicting tariff threats with self-contradictory rationales” such as protecting favored industries to increasing tax revenue yields.
Investors are turning their attention to critical upcoming data releases, including the March jobs report due this Friday, along with figures on private payrolls and job openings.
Wall Street looks to use the data in hopes of gaining further clarity on economic trends and resilience.
