US close: Stocks fall after volatile session as tariff chaos continues

(Sharecast News) - Stocks finished mostly lower on Monday after another volatile day across global financial markets, as investors continued to scale back risk appetite and react to the latest gloomy economic predictions amid an escalating trade war.

The Dow finished 0.9% lower at 37,965.60 and the S&P 500 fell 0.2% to 5,062.25, with both indices hitting their lowest marks since late-April 2024.

The Nasdaq Composite, however, edged 0.1% higher to 15,603.26, as the selling pressure eased after an 11% sell-off since Donald Trump's sweeping trade tariffs were unveiled last Wednesday.

"The market moves have been brutal today, volatility as measured by the Vix has surged to its highest levels in nearly five years and is closing in on peak Covid volatility levels," said Kathleen Brooks, research director at XTB. "It is hard to pin down where stocks will go next since one theme is dominating markets: President Trump's massive overreach on tariff policy and its economic and financial effects. Markets are moving on the back of news headlines."

Stocks staged a brief rally in morning trade on the back of a false social media report that said the Trump administration was considering a 90-day pause in tariffs for all countries except China. The rumours, which were quickly quashed by the White House, saw the S&P 500 swing from a near-5% loss early on to a 3.4% gain within ten minutes. Just half an hour later, the index was back in the red again.

Tariff chaos continues

Investors had hoped to receive word that the White House was holding negotiations with trading partners to lower tariff rates or that it would consider delaying so-called reciprocal tariffs beyond 9 April. However, Trump remained defiant, stating "sometimes you have to take medicine to fix something".

He also threatened to slap an additional 50% tariff on China from Wednesday if Beijing doesn't withdraw retaliatory duties on the US. China has already placed a retaliatory 34% tariff on US imports, with Canada and the European Union expected to follow its lead.

Commerce Secretary Howard Lutnick also said the tariffs were "definitely going to stay in place for days and weeks", despite Trump vowing to keep them in place for the entirety of his second term.

In other news, a number of prominent Wall Street figures have begun to speak out against Trump's tariffs, with heavyweights Jamie Dimon, Stan Druckenmiller and Bill Ackman all raising concerns publicly about the impact of such a strategy.

Market movers

US Steel surged 16% after Trump ordered a fresh review of Nippon Steel's proposed takeover bid, calling on the Committee on Foreign Investment in the United States to "determin[e] whether further action in this matter may be appropriate".

Comments from UBS were weighing on machinery companies Caterpillar, Terex and Paccar, after the Swiss bank cut its rating on the three peers to 'sell', raising fears about falling demand and higher prices as a result of the trade war.

Banking stocks were mixed after a recent tariff-related sell-off, with JPMorgan Chase & Co, Morgan Stanley and Citi rallying into the close to finish higher, while Goldman Sachs fell after being downgraded to 'equal weight' by Morgan Stanley analysts.

Tariff-related supply chain concerns were continuing to hit stocks in the auto and tech sectors, with Stellantis, Ford and GM joining Apple, Intel and Microsoft in the red.

Dollar Tree jumped after Citi raised its recommendation on the discount retail chain to 'buy', saying it is well placed to benefit from the gloomy economic outlook.