The Dow opened down more than 1,200, then shot up 700 points only to fall again.
Investors are bracing for another volatile week, as the markets were fluctuating wildly on Monday.
The S&P 500 opened down around 175 points of 3.4%, while the Nasdaq was off 610 points or 3.9%. The Dow Jones Industrial Average opened 1,200 points or 3.1% lower while the Russell 2000 Index was off 84 points or 4.4%.
But by 10:15 a.m. ET, markets did an about face. Not only were all of the losses erased, but they were surging. The S&P 500 was up 150 points or 3%, while the Nasdaq had gained more than 600 points.
But a few minutes later at 10:30 a.m. ET, the markets were back in negative territory.
The extreme volatility reflects the uncertainty that the tariffs have caused throughout the market. The CBOE Volatility Index, or VIX, shot up to 60 on Monday morning, up from 22 on the day before Trump announced the tariffs. The VIX during normal times is typically in the 10s or low 20’s.
This comes after the worst week for U.S. stocks in five years, as the Dow dropped 7.8% last week, while the S&P 500 was off 9.1%. Nasdaq dropped 10% for the week, while the Russell 2000 ended the week down roughly 9.7%.
Both the Nasdaq and Russell 2000 are now in bear markets. The Russell 2000 Index is down about 25% since December 1, 2024, and 18% year-to-date. The Nasdaq Composite is down 22% since February 19 and 19.3% YTD.
The S&P 500 could follow those indexes into bear territory this week as it started the week down about 16.6% YTD. The Dow has fared the best of the major indexes, down 12.8% YTD.
U.S. markets have lost about $6 trillion in value over the last two days last week, not counting Monday’s losses. But since the market highs on February 19, the markets have lost a staggering $11 trillion in value, according to CNBC and other sources.
Fake news temporarily spikes markets
This week, tariffs will again be front and center. When the markets briefly shot higher on Monday morning, it was likely related to comments attributed to White House economic adviser Kevin Hassett. Hassett, according to Reuters and others, said Trump was considering a 90-day pause in tariffs on all countries, expect China.
But the White House denied this, as spokewoman Karoline Leavitt called it “fake news.”
The false reports stemmed from misinterpreted comments made on Fox News by Hassett, reported The Independent. Hassett was responding to a question about a pause, as suggested by hedge fund manager Bill Ackman.
“I think that the president is going to decide what the president is going to decide,” Hassett said, reported The Independent. “I would urge everyone, especially Bill, to ease off the rhetoric a little bit.”
European leaders meet to discuss tariffs
The focus now is on the European Union, which has prepared countermeasures, or retaliatory tariffs against the U.S., said European Commission president Ursula von der Leyen. But she also said Europe is open to negotiations.
“Europe is always ready for good deal. So, we keep it on the table,” von der Leyen said, reported The Guardian.
European leaders were meeting Monday in Luxembourg to discuss next steps. Japan also signaled they are open to negotiations, as Japanese Prime Minister Shigeru Ishiba said Sunday he would pitch a deal to Trump, according to Yahoo.
Also, Trump was set to meet with Israel Prime Minister Benjamin Netanyahu on Monday after to discuss tariffs.
Successful negotiations or a pullback on tariffs could certainly ease investors’ concerns to some extent. But, just the opposite, if talks break down, or Europe or other nations retaliate or move toward forming their own trading blocs, markets could take a hit.
The added tariffs are set to take effect on Wednesday April 9
