A false dawn on the tariff front fueled a brief but powerful midmorning rally Monday, with the S&P 500 surging some 7% in just over half an hour, before the administration clarified that there will be no delay in implementing new levies and selling resumed.
The episode, which left U.S. stocks down for a third day, highlights the increasing desperation on Wall Street as the trade-war rout of 2025 extends into a new week. In midday trading, the Dow Jones Industrial Average led major indexes lower with a 580 point, or 1.5%, decline.
The scale of the brief rally shows how much desire there is among investors to return to the well-trod territory of administrations that want to assist markets and stock declines that are quickly followed by sharp bouncebacks. Some major investors are starting to sound off publicly about what they see as the dangers in the shift to large tariffs.
So far, though, it's clear that President Trump and his advisers aren't humming the same tune.
Trump said Monday he plans to add an additional 50% tariff on China starting Wednesday if the country doesn’t withdraw its retaliatory tariff increase on the U.S. “Additionally, all talks with China concerning their requested meetings with us will be terminated!” he wrote.
Stocks fell in response. The broad S&P 500 index stood close to bear-market territory, defined as a 20%-plus decline from a recent peak. The tech-heavy Nasdaq Composite fell into a bear market last week.
Wall Street's "fear gauge," the VIX, leapt as investors braced for further volatility ahead, and global markets recoiled.
In Asia, where many economies are highly trade-reliant, stocks plunged. Hong Kong's main equity benchmark lost 13%, in its worst day since the Asian financial crisis. Indexes in Shanghai, Taipei and Tokyo fell between 7% and 10%.
The selloff didn't spare Europe, where the Stoxx Europe 600 sank more than 4%. Bitcoin and oil prices fell.
Treasurys were volatile, as investors considered how tariffs could both slow short-term growth and rekindle inflation, complicating the task of the Federal Reserve. Futures prices showed traders stepping up bets on multiple rate cuts this year.
Early Monday, Trump renewed his call for the Fed to ease policy and said his policies were bringing down oil prices and interest rates.
U.S. stocks lost $6.6 trillion in value during a two-day washout last week after President Trump announced larger tariffs than Wall Street expected and China said it would match the duties on all U.S.-made goods.
Here’s what else you need to know:
Israeli Prime Minister Benjamin Netanyahu is set to be the first world leader to hold in-person talks with Trump about the tariffs. U.S. officials said more than 50 countries had reached out to start negotiations.
The Chinese Communist Party’s flagship newspaper said Chinese policymakers were well-prepared to cope with U.S. tariffs by using policy tools including monetary and fiscal easing.
Influential Wall Street voices raised concerns. JPMorgan's Jamie Dimon warned about the effect of tariffs on growth, prices, and the economic alliances that have underpinned America's “extraordinary standing in world affairs.”
Meanwhile, billionaire investor Bill Ackman called for a 90-day pause on the implementation of the tariffs, saying they are a mistake.
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