Wall Street equities have been hammered since Trump’s sweeping tariffs, announced late Wednesday, on all imports into the US and much higher levies on some major trading partners.
Early on Monday, all three major US indexes touched their lowest levels in more than a year, and the CBOE Volatility index, Wall Street’s fear gauge, breached 60 points, hitting its highest level since August 2024.
“The underlying problem of the market is that the administration’s approach to trade imbalances is to try a cure that’s worse than the disease,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
“It’s clear that investors favor either a pause or a different look at how to do this. It’s very telling that of the many Trump supporters in the investment and business community, it doesn’t look like there’s anybody stepping up and endorsing the administration’s approach to tariffs.”
In the two days following Trump’s tariff announcements last week, the benchmark S&P 500 index dived 10.5% and lost about $5 trillion in market value. It was the biggest two-day loss since March 2020.
On Friday, the blue-chip Dow confirmed it was in a correction, or more than 10% below its December record close while the Nasdaq confirmed it was in a bear market.
In Monday morning trading, the S&P 500 had fallen 20% below its record closing high. The index swung briefly into a rally, after a news report said Trump was considering a 90-day pause on tariffs. White House officials quickly denied the report, sending the market back into the red.
Meckler said the market’s wild swings on Monday left investors “a little bit concerned that if facts start to change, you could see a very rapid rise to this market.”
“It’s leading to this back-and-forth movement of rallies that are effectively being sold and drops in the market where people are covering shorts or trying to find a place to buy.”
Several speeches by Federal Reserve officials and a series of economic indicators, including consumer price data, are expected this week, with markets keenly observing any signals of recessionary fears.
