- U.S. stock indexes rode a brief rebound Monday before plunging later in the day than mostly recovering
- Global investment markets were in the red on Monday amid ongoing tariff uncertainty.
- President Trump, on Monday, threatened an additional 50% tariff on Chineses goods
After starting the week down sharply, major U.S. stock indexes swung briefly and profoundly into positive territory Monday morning before plunging again amid global investment turmoil fueled by a raft of new international trade tariffs declared by President Donald Trump last week.
By the end of the regular trading on Monday, however, the major indexes were about even for the day. U.S. investment markets lost some $6.6 trillion in value last week following Trump’s tariff announcement.
Stock markets continue to lose value
While investors held out hope that the Trump administration would pause the sweeping new trade levies, some of which went into effect on Saturday, or indicate some rates would be reduced via negotiations with leaders of targeted countries, comments from the president and his team over the weekend showed no signs of capitulation.
“What’s going to happen to the markets, I can’t tell you,” Trump said late Sunday in comments to reporters aboard Air Force One. “I don’t want anything to go down. But sometimes you have to take medicine to fix something.”
U.S. Commerce Secretary Howard Lutnick told CBS News that the tariffs would not be postponed. “The tariffs are coming. ... They are definitely going to stay in place for days and weeks.”
The Dow Jones Industrial Average fell 0.91%, about 350 points, after falling 1,700 points to hit a sessions low then moving back up almost 2,600 points in a record reversal, per CNBC. The S&P 500 shed about a quarter point while the tech-heavy Nasdaq Composite move up a tenth of a point.
Amid the roller-coaster swings Monday, Trump threatened to slap China with an additional 50% tariff in response to the Asian nation’s announcement of its own new 34% tariff on imported U.S. goods, itself a retaliatory move following last week’s U.S. tariff edicts.
In a post on Truth Social, Trump said he was following through on his promise to respond swiftly to any tariff retaliation by immediately instituting “new and substantially higher Tariffs, over and above those initially set.”
“Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th. Additionally, all talks with China concerning their requested meetings with us will be terminated!”
Ahead of Trump’s new tariff threat, stocks plunged in the highly trade-reliant Asian markets where Hong Kong’s main equity benchmark lost 13%, in its worst day since the Asian financial crisis, per The Wall Street Journal. Indexes in Shanghai, Taipei and Tokyo fell between 7% and 10%.
European investment markets also saw widespread losses on Monday as the pan-European Stoxx 600 index fell up to 6% earlier in the session, but had pared losses to 3.2% by 3:30 p.m. London time, per CNBC.
Frankfurt’s DAX index was up and down Monday afternoon after plunging up to 10% in the morning, popping into the green at one point before again retreating to a 2.2% loss. Germany is expected to be hit particularly hard by Trump tariffs due to its strong U.S. trade ties and prevalence of impacted sectors such as automakers.
Business leaders warn of wider tariff impacts
In his annual letter to investors published on Monday, JPMorgan Chase CEO Jamie Dimon warned the swirl of uncertainty around the new tariff policies could lead to impacts beyond the levies themselves and said the sooner trade issues could be resolved, the better “because some of the negative effects increase cumulatively over time and would be hard to reverse.”
“Whatever you think of the legitimate reasons for the newly announced tariffs — and, of course, there are some — or the long-term effect, good or bad, there are likely to be important short-term effects," Dimon wrote. “As for the short-term, we are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products. How this plays out on different products will partially depend on their substitutability and price elasticity. Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
Billionaire businessman and Trump supporter Bill Ackman acknowledged in social media postings over the weekend that other nations have taken advantage of the U.S. to protect their home industries but noted the president has an opportunity to quell the unrest over tariff policy by declaring a pause on implementation to engage in direct negotiations. But failing to do so, the new policies could lead to cataclysmic impacts on the U.S. and global economies.
“By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital,” Ackman, founder and CEO of Pershing Square Capital Management, wrote. “The president has an opportunity to call a 90-day time out, negotiate and resolve unfair asymmetric tariff deals, and induce trillions of dollars of new investment in our country.
“If, on the other hand, on April 9th we launch economic nuclear war on every country in the world, business investment will grind to a halt, consumers will close their wallets and pocket books, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate.”