The Dow Jones Industrial Average fell yet again on Monday, keeping President Trump under pressure over the tariff policy that has roiled the world since it was announced last Wednesday.
Trump appear adamant that tariffs are here to stay. He has argued both that they have the capacity to reinvigorate American manufacturing and that they are important in creating fairer trading relations with other nations.
Trump is “not looking at” a pause in the tariffs, he told reporters at the White House on Monday afternoon as he met with Israeli Prime Minister Benjamin Netanyahu.
A big change in trading policy was the nation’s “only chance…to reset the table,” Trump also contended. The president acknowledged there would be some turmoil along the way but insisted there would be a “beautiful picture at the end.”
His confidence was not shared by financial markets, which whipsawed throughout the day.
They opened sharply down, after markets in the Far East and Europe had fallen during their trading days. American markets briefly spiked when reports emerged — but later proved erroneous — that Kevin Hassett, the director of Trump’s National Economic Council, had left the door ajar to a 90-day pause in tariff implementation.
The White House admonished those propagating this idea as “fake news,” and the markets duly fell to earth once again.
The Dow ended the day down 349 points, or nine-tenths of a percentage point. The broader-based S&P 500 fell by roughly one-quarter of a percentage point, while the tech-heavy NASDAQ wrung out a small gain of one-tenth of a percentage point.
Those moves were not of anywhere near the magnitude of late last week, when the Wall Street Journal estimated that $6.6 trillion was wiped off the value of U.S. stocks in just two days.
But they still leave Wall Street — and the roughly 160 million Americans who are invested in the stock market — on tenterhooks.
One huge question is whether the tariff shock will force the U.S. into a recession, as businesses face deep uncertainty and consumers consider curtailing personal spending.
Analysts at JPMorgan Chase now expect the economy to contract by one-third of a percentage point in this year, having previously forecast growth of 1.3 percent. The bank’s CEO Jamie Dimon contended on Monday that a recession was not yet certain, but that the new tariff regime “will slow down growth.”
Dimon also expressed concern about the possibility of long-lasting tariffs, asserting that the downsides to such an approach would “increase cumulatively over time.”
Separately, BlackRock CEO Larry Fink told the Economic Club of New York on Monday that “the economy is weakening as we speak.” According to Bloomberg, Fink also noted that “most CEOs I talk to would say that we are probably in a recession right now.”
Most conspicuously of all, billionaire investor Bill Ackman — a strong Trump supporter with a combative online persona — tweeted on Sunday that Trump should “call a 90-day time out” to negotiate on tariffs. If this did not happen, Ackman predicted, “We are heading for a self-induced, economic nuclear winter, and we should start hunkering down.”
He noted later Sunday that, “To state the obvious, it does not help our country’s and our president’s negotiating position to be trying to strike deals while our market is collapsing.”
Those expressions of concern find echoes in the political world, where polls were already showing signs of erosion in support for Trump even before he announced his sweeping tariffs last Wednesday.
A Wall Street Journal poll released on Friday — but based on data that had been collected only up until the day before Trump’s tariff announcement — showed the president underwater by 5 points on his overall job approval (46 percent to 51 percent). Trump was down by an 8-point margin on his management of the economy (44 percent to 52 percent).
An Economist/YouGov poll last week had the same minus-5 margin on Trump’s overall job approval, while a Reuters/Ipsos poll was even worse for the president, showing him winning the approval of just 43 percent of Americans and the disapproval of 53 percent for his job performance.
Trump has no more elections to fight — assuming his suggestions of an unconstitutional third term come to nothing — but any steeper decline in his popularity could sap his political capital and eventually put the Republican Party in serious trouble in the 2026 midterms.
Signs of unease among the GOP have been growing.
Sen. Ted Cruz (R-Texas) warned on Friday that a prolonged period of elevated tariffs would raise the risks of a recession. This, in turn, could set the stage for a political “bloodbath.”
“You would face a Democrat House and you might even face a Democrat Senate,” Cruz said on his podcast.
Separately, seven Republican senators had by Monday signed onto a bill that would shift responsibility to Congress for tariff policy. Longtime Trump skeptics Sens. Susan Collins (Maine), Mitch McConnell (Ky.) and Lisa Murkowski (Alaska) were among the names. But so were figures who are usually more supportive of Trump, such as Sens. Chuck Grassley (Iowa) and Thom Tillis (N.C.).
Still, Senate Majority Leader John Thune (R-S.D.) dismissed the effort by telling reporters on Monday afternoon, “I don’t think that has a future.”
To be sure, the vast bulk of GOP elected officials — and Republican voters — remain strongly supportive of Trump.
But beneath the surface, there is disquiet in conservative circles, especially over one fundamental question: Is the administration flexing its muscle to secure tariff concessions from other nations, or is Trump intent on maintaining tariffs for the years required to test his thesis that he can bring back manufacturing jobs in a significant way?
So far, there is little clarity.
“It can both be true,” Trump told reporters during his Netanyahu meeting on Monday. “There can be permanent tariffs, and there can also be negotiations.”
The Memo is a reported column by Niall Stanage.
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