S&P 500 : U.S. stock markets ended lower on Monday, as renewed fears over inflation and escalating trade tensions weighed heavily on investor sentiment. President Donald Trump’s warning about potentially increasing tariffs on China only intensified the pressure, sparking uncertainty across Wall Street.
Market Reaction to Tariff Fears
The Dow Jones Industrial Average dropped by 349.26 points (–0.91%) to close at 37,965.60, while the S&P 500 slipped 11.83 points (–0.23%) to finish at 5,062.25. On the other hand, the Nasdaq Composite managed a modest gain of 15.48 points (+0.10%) to end at 15,603.26.
The losses come on the heels of Trump’s announcement last Wednesday about sweeping new tariffs on all imports into the United States. This aggressive stance has fueled investor concerns over the long-term impact on global trade and economic growth.
Expert Reactions: “A Cure Worse Than the Disease”
Rick Meckler, partner at Cherry Lane Investments, shared his concerns:
“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. Investors clearly prefer a pause or a more balanced strategy.”
His comments reflect the broader unease among market participants about the potential fallout from Trump’s trade policies.
Massive Market Losses Since Announcement
Since the tariff announcement:
- The S&P 500 has plunged 10.5%, wiping out nearly $5 trillion in market value — the worst two-day loss since March 2020.
- The Dow has officially entered a correction, falling more than 10% from its December record high.
- The Nasdaq is now in a bear market, down 20% from its recent peak.
On Monday, the S&P 500 briefly dipped more than 20% below its all-time high before a temporary rally was sparked by a report suggesting Trump might pause tariffs for 90 days. However, White House officials quickly denied the rumor, sending markets back into negative territory.
High Volatility Dominates Trading
“The market’s wild swings left investors concerned,” Meckler said.
“If facts start to change, you could see a very rapid rise. But for now, we’re seeing a back-and-forth of rallies being sold off and dips being bought.”
Sector and Stock Highlights
- Real estate was the worst-performing sector in the S&P 500, falling 2.4%.
- Communications services led the gainers, rising 1%, while technology added a modest 0.3%.
On the stock front:
- Apple Inc. fell 3.7%
- Tesla Inc. declined 2.6%
- Nvidia surged 3%
- Amazon.com climbed 2.5%
Market Breadth and Volume Surge
On the New York Stock Exchange:
- Declining stocks outnumbered advancers by a 4.45-to-1 ratio.
- There were only 42 new highs compared to 2,036 new lows.
On the Nasdaq:
- 1,447 stocks rose, while 3,070 declined, marking a 2.12-to-1 ratio of decliners to advancers.
Trading volume was intense, with 29.13 billion shares exchanged across U.S. exchanges — far above the 17.13 billion daily average over the last 20 sessions. Friday also set a new record with 26.79 billion shares traded, beating the previous high from January 27, 2021.
What’s Next for the Markets?
With trade policy uncertainty and inflation risks still looming large, investors are closely watching upcoming speeches by Federal Reserve officials and critical economic data, including consumer price figures. Many are hoping for clues about the direction of interest rates and the overall economy.
As things stand, market volatility is likely to remain elevated in the days ahead.
