NEW YORK (AP) 鈥� U.S. stocks careened through a manic Monday after threatened to crank higher, despite a stunning display showing how dearly Wall Street wants him to do the opposite.
The S&P 500 slipped 0.2% at the end of a day full of heart-racing reversals as battered financial markets try to figure out what Trump鈥檚 ultimate goal is for his . If it鈥檚 to get other countries to agree to trade deals, he could lower his tariffs and avoid a possible recession. But if it鈥檚 to remake the economy and stick with tariffs for the long haul, stock prices may need to fall further.
The Dow Jones Industrial Average fell 349 points, or 0.9%, and the Nasdaq composite edged up by 0.1%.
All three indexes started the day sharply lower, and the Dow plunged as many as 1,700 points following even worse losses elsewhere in the world. But it suddenly surged to a gain of nearly 900 points in the late morning. The S&P 500, meanwhile, went from a loss of 4.7% to a leap of 3.4%, which would have been its biggest jump in years.
The sudden rise followed a false rumor that Trump was considering a 90-day pause on his tariffs, one that a quickly labeled as 鈥渇ake news.鈥� That a rumor could move trillions of dollars鈥� worth of investments shows how much investors are hoping to see signs that Trump may let up on tariffs.
Stocks quickly turned back down, and shortly afterward, Trump dug in further and said he may after the world鈥檚 second-largest economy with its own set of tariffs on U.S. products.
It鈥檚 a slap in the face to Wall Street because it suggests Trump may not care how much pain he inflicts on the market. Many professional investors had long thought that a president who used to crow about records reached under his watch would pull back on policies if they sent the Dow reeling.
On Sunday Trump told reporters aboard Air Force One that he and that 鈥渟ometimes you have to take medicine to fix something.鈥�
Trump has given several reasons for his stiff tariffs, including to bring manufacturing jobs back to the United States, which is a process that could take years. Trump on Sunday said he wanted to bring down the numbers for how much more the United States imports from other countries versus how much it sends to them.
Indexes nevertheless did keep swinging between losses and gains Monday after Trump鈥檚 latest tariff threat, in part because hope still remains in markets that negotiations may still come.
鈥淲e鈥檙e not calling the all-clear at all, but when you have this type of volatility in the market, of course you鈥檙e going to have back and forth鈥� in markets not just day to day but also hour to hour, said Nate Thooft, a senior portfolio manager at Manulife Investment Management.
鈥淲e鈥檙e all waiting for the next bit of information,鈥� he said. 鈥淟iterally a Truth Social tweet or an announcement of some sort about real negotiations could dramatically move this market. This is the world we live in right now.鈥�
All that seemed certain Monday was the financial pain hammering investments for a third day after Trump announced tariffs in his 鈥淟iberation Day.鈥�
Stocks in plunged 13.2% for their worst day since 1997. A barrel of benchmark U.S. crude oil dipped below $60 during the morning for the first time since 2021, hurt by worries that a global economy weakened by trade barriers will burn less fuel. sank below $79,000, down from its record above $100,000 set in January, after holding steadier than other markets last week.
Trump鈥檚 tariffs are an attack on the globalization that鈥檚 remade the world鈥檚 economy, which helped bring down prices for products on the shelves of U.S. stores but also caused production jobs to leave for other countries.
It also adds . Investors have become nearly conditioned to expect the central bank to swoop in as a hero by slashing interest rates to protect the economy during every downturn. But the Fed may have less freedom to act this time around because remains higher than the Fed would like. And while lower interest rates can goose the economy, they can also put upward pressure on inflation.
鈥淭he recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,鈥� JPMorgan CEO Jamie Dimon, one of the most influential executives on Wall Street, wrote in his annual letter to shareholders Monday. 鈥淲hether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.鈥�
In the bond market, Treasury yields rallied to recover some of their sharp drops from earlier weeks. Some of the big move may have been because of reduced expectations for cuts to interest rates by the Fed. Some analysts also said it could be due to investors outside of the United States wanting to pare their U.S. investments.
The yield on the 10-year Treasury jumped to 4.20% from 4.01% late Friday.
Earlier in the day, the S&P 500 briefly fell more than 20% below its record set . If it finishes a day below that bar, it would be a big enough drop that Wall Street has a name for it. A 鈥渂ear market鈥� signifies a downturn that鈥檚 moved beyond a , which happens every year or so, and has graduated into something more vicious.
The S&P 500, which sits at the , is coming off its began crashing the global economy in March 2020.
All told, the index fell 11.83 points Monday to 5,062.25. The Dow Jones Industrial Average dropped 349.26 to 37,965.60, and the Nasdaq composite added 15.48 to 15,603.26.
___
Kurtenbach reported from Bangkok. McHugh reported from Frankfurt, Germany. Associated Press writers Ayaka McGill, Paul Harloff, Matt Ott and Jiang Junzhe also contributed.
Stan Choe, Elaine Kurtenbach And David Mchugh, The Associated Press
