U.S. stocks were swinging wildly Monday as a market meltdown continued following President Donald Trump’s recent tariff rollout, but with the S&P 500 on track to enter a bear market, what will that mean for you?
The news comes amid a manic morning where indexes plunged, soared and then sank again as Wall Street tossed around a false rumor about Trump’s plans for his trade war. Some investors are holding onto hope that Trump may still lower his tariffs after negotiating with other countries, and Trump said Sunday that he’s heard from leaders “dying to make a deal.”
Countries are scrambling to figure out how to respond to the tariffs, with China and others retaliating quickly.
Trump’s tariff blitz fulfilled a key campaign promise as he acted without Congress to redraw the rules of the international trading system. It was a move decades in the making for Trump, who has long denounced foreign trade deals as unfair to the U.S.
The higher rates are set to be collected beginning Wednesday, ushering in a new era of economic uncertainty with no clear end in sight.
Here’s what to know:
What is a bear market?
A bear market is when prices fall at least 20% from a recent high.
“Bear markets are the mirror image of bull markets, which represent an increase of at least 20% from market lows. Bear markets are more extreme than market corrections—a term used to describe a downward price swing of at least 10% from a recent high,” according to Fidelity.
According to CNBC, the S&P 500 lost 4% on Monday, bringing its three-day losses to around 13%, a drop not seen in that short of time since 2008 during the Great Financial Crisis. If the benchmark closes at these levels, it will bring its losses from its closing record touched in February to 20%. The Nasdaq Composite dropped 4%, further into bear territory, as investors sold their tech winners to raise cash. The Nasdaq is off 26% from its high.
Bears markets aren’t incredibly common, but they also aren’t uncommon.
“Over the past 150 years, US stocks have entered bear-market territory about every 6 years, on average,” Fidelity reported.
What’s happening with the stock market?
The Dow Jones Industrial Average briefly erased a morning loss of 1,700 points, shot up more than 800 points, then went back to a loss of 629 points.
The S&P 500 likewise made sudden up-and-down lurching movements and was down 0.7% in the first hour of trading. The Nasdaq composite was up 0.2% That followed sharp drops around the world as worries rise about whether Trump’s trade war will torpedo the global economy.
Bitcoin, the world’s most popular cryptocurrency dipped below $75,000 Monday morning before seeing a slight rebound.
Bitcoin’s prices haven’t been this low since just after President Donald Trump’s Election Day victory last year launched a bull run in crypto prices.
Other major digital assets, like ether, XRP and solana, saw even bigger one-day percentage drops on Monday morning.
Treasury yields are mixed after briefly rallying in the early going.
The yield on the 10-year Treasury rose to 4.09% from 4.01% late Friday. It had fallen as low as 3.88% overnight.
The yield, which influences interest rates on mortgages and other consumer loans, was nearing 4.8% in mid-January.
The two-year yield, which closely tracks expectations for action by the Federal Reserve, was steady at 3.68%.
What’s causing the stock market shifts?
Wall Street’s big swings are being led by the technology sector, which has an outsized impact on the broader market.
The sector is full of companies with pricey stock valuations, such as Nvidia, which tend to push and pull the market with greater force than less valuable stocks. Their heft means a big shift either way for a just handful of companies can sink or lift the S&P 500.
Technology companies, including chipmakers, have seen their values skyrocket over hopes for artificial intelligence advancements. Higher costs for chips and other technologies pose a risk to that development and the earnings growth prospects for companies like Nvidia, Apple and Microsoft.
Why did the stock market rise Monday?
The stock market briefly spiked on a report that Kevin Hassett, a top White House economic adviser, said the president was considering a 90-day pause on tariffs.
The supposed remark from Hassett circulated on social media, but no one could pinpoint where it came from even as the market flashed from red to green.
Hassett had spoken to Fox News earlier in the morning, when he was asked about a potential pause. However, he was noncommittal.
“I think the president is going to decide what the president is going to decide,” he said.
The episode showed that traders were operating on a hair trigger and eager for any sign of encouraging news for the market.
A White House account on X said it was “fake news” that Trump was considering a tariff pause. The account, @RapidResponse47, weighed in shortly after the market spiked, then dropped again.
What else could happen?
President Donald Trump threatened additional tariffs on China on Monday, raising fresh concerns that his drive to rebalance the global economy could lead to a trade war.
Trump’s threat, which he delivered on social media, came after China said it would retaliate against U.S. tariffs announced last week.
“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,” he wrote on Truth Social. “Additionally, all talks with China concerning their requested meetings with us will be terminated!
Trump has remained defiant as the stock market continued plunging and fears of a recession grew.
“Be Strong, Courageous, and Patient, and GREATNESS will be the result!” he wrote.
Even some of Trump’s allies are raising alarms about the economic damage, and financial forecasts suggest more pain on the horizon for U.S. businesses, consumers and investors.
The Republican president has insisted his tariffs are necessary to rebalance global trade and rebuild domestic manufacturing. He accused other countries of “taking advantage of the Good OL’ USA!” on international trade and said “our past ‘leaders’ are to blame for allowing this.” He singled out China as “the biggest abuser of them all” and criticized Beijing for increasing its own tariffs in retaliation.
Trump also called on the Federal Reserve to lower interest rates. On Friday, Federal Reserve Chair Jerome Powell warned that the tariffs could increase inflation, and he said “there’s a lot of waiting and seeing going on, including by us,” before any decisions would be made.
Investors expect the U.S. central bank to cut its benchmark interest rates at least four times by the end of this year, according to CME Group’s FedWatch, a sign that concerns about inflation will be eclipsed by fears of layoffs and a shrinking economy.
Trump said over the weekend he wouldn’t back down from his tariffs despite the turmoil in the global markets.
“Sometimes you have to take medicine to fix something,” Trump said.
Goldman Sachs issued a new forecast saying a recession has become more likely even if Trump backtracks from his tariffs. The financial firm said economic growth would slow dramatically “following a sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed.”
European Commission President Ursula von der Leyen said the European Union would focus on trade with other countries besides the United States, saying there are “vast opportunities” elsewhere.
White House trade adviser Peter Navarro suggested countries would need to do much more than simply lower their own tariff rates to reach deals, saying they would have to make structural changes to their tax and regulatory codes.
“Let’s take Vietnam,” he said on CNBC. “When they come to us and say, ‘We’ll go to zero tariffs,’ that means nothing to us because it’s the non-tariff cheating that matters.”
Bill Ackman, a hedge fund manager, lashed out at Commerce Secretary Howard Lutnick on Sunday as “indifferent to the stock market and the economy crashing.” He said Cantor Fitzgerald, the financial firm led by Lutnick before he joined the Trump administration, stood to profit because of bond investments.
On Monday, Ackman apologized for his criticism but reiterated his concerns about Trump’s tariffs.
“I am just frustrated watching what I believe to be a major policy error occur after our country and the president have been making huge economic progress that is now at risk due to the tariffs,” he wrote on X.
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