Major stock indexes were mixed on Monday in turbulent trading dominated by concerns over U.S. President Donald Trump's global trade war, while the U.S. dollar and bond yields rose.
Trump said on Monday he will impose an additional 50% tariff on China if Beijing does not withdraw its retaliatory tariffs on the United States. In addition, the White House denied a report that Trump is considering a 90-day pause in tariffs for all countries except China.
The report, which the White House said was "fake news," briefly turned U.S. stocks positive earlier.
The market swung wildly between heavy losses and gains, with the S&P 500 last up slightly.
"You can tell shorts are on a hair trigger today, watching around every corner for a possible Fed intervention, tariff pause, or trade deal. It goes to show you just how short-lived this market rout is likely to be," said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia.
Traders bet the increasing risk of recession could result in the Federal Reserve cutting interest rates as early as May. Futures markets moved to price in almost five quarter-point cuts in U.S. rates this year.
Rising costs will also put pressure on company profit margins, with the U.S. earnings season about to get under way later this week.
The Dow Jones Industrial Average (.DJI) fell 82.24 points, or 0.21%, to 38,232.62, the S&P 500 (.SPX) rose 28.04 points, or 0.59%, to 5,104.20 and the Nasdaq Composite (.IXIC) rose 166.96 points, or 1.07%, to 15,754.75.
The S&P 500 went from a low of 4,835.04 to a high of 5,246.57.
MSCI's gauge of stocks across the globe (.MIWD00000PUS) fell 14.27 points, or 1.87%, to 750.02.
At the open, the S&P 500 had been on pace to confirm a bear market. By Friday's close, S&P 500 companies had wiped out $5 trillion in stock market value since Trump unveiled the tariffs late on Wednesday.
European shares also slumped, with the STOXX 600 closing at its lowest since January 2024. The pan-European STOXX 600 (.STOXX) dropped 4.5%, down for the fourth straight session.
In Asia, Hong Kong's Hang Seng's (.HSI) 13% one-day slump was the largest since 1997, while in mainland China the blue-chip CSI 300 (.CSI300) index was down 7%, only finding a floor when state media reported China's sovereign fund Central Huijin was a buyer.
Treasury yields rose, with traders continuing to try to gauge how long trade levies will last and to what degree they will dent economic growth.
The yield on benchmark U.S. 10-year notes rose 17.7 basis points to 4.168%, from 3.991% late on Friday. They fell to 3.86% on Friday, the lowest since October 4.
The 2-year note yield, which typically moves in step with interest rate expectations for the Fed, rose 7.4 basis points to 3.744%, from 3.67% late on Friday.
The European Union is still willing to negotiate with the U.S. administration, European Commission President Ursula von der Leyen reaffirmed on Monday, adding that Brussels was also ready to take counter measures.
The dollar also gained, while a gloomier growth outlook kept oil prices down.
The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.6% to 103.21, with the euro down 0.08% at $1.0946. Against the Japanese yen , the dollar strengthened 0.74% to 147.96.
U.S. crude fell 1.16% to $61.27 a barrel and Brent fell to $64.77 per barrel, down 1.24% on the day.
Gold prices fell as well as investors opted to buy the dollar. Spot gold fell 2.31% to $2,967.17 an ounce.
JPMorgan Chase (JPM.N) CEO Jamie Dimon warned the tariffs could have lasting negative consequences, while fund manager Bill Ackman said they could lead to an "economic nuclear winter."
"Last week's theme is continuing but there were some meaningful developments over the weekend, in particular with Wall Street titans and business leaders effectively coming out very strongly against President Trump's policies and tariffs," said Oliver Pursche, senior vice president, advisor for Wealthspire Advisors in Westport, Connecticut.
"That pressure is going to continue to mount."
