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Stock market today: S&P 500 ends lower after wild swings on tariff-led volatility

2025-04-08 09:10:57

S&P 500 stocks cut some losses Monday, but ultimately ended lower after swinging widely during the session amid ongoing speculation on whether President Donald Trump will offer countries a path toward negotiating reprieves on tariffs.

At 4:00 p.m. ET, the Dow Jones Industrial Average dropped 349 points, or 1.2%, the S&P 500 index gained 0.2%, while the NASDAQ Composite added 0.04%.

The benchmark indices had opened sharply lower Monday, continuing the selloff seen at the end of last week, which had seen the broad-based S&P 500 index tumble over 10%, erasing nearly $5 trillion in market value, marking its most significant two-day loss since March 2020, the onset of the COVID-19 pandemic.

Trump reiterates no pause on tariffs; threatens to raise China tariffs following retaliation; talks to start with Japan

In a press briefing on Monday, Trump reiterated that the United States wasn’t considering pausing the reciprocal tariffs that have wrecked havoc on markets.

Earlier in the session, stock saw a brief reprieve on unconfirmed reports that U.S. President Donald Trump was considering pausing his sweeping trade tariffs for 90 days on all countries except China. The White House later debunked this as "fake news", but the short-term jump in stocks illustrates the jitteriness of the market after two brutal days of selling.

Trump, in a post on Truth Social media shortly after 11 AM ET, stated that the United States will impose an additional 50% tariff on Chinese goods if China does not rescind its recent 34% tariff hike by April 8, 2025. This ultimatum follows China’s retaliatory tariffs and other trade practices that Trump has labeled as abusive.

Yet, in a sign of leeway on tariffs, Treasury Secretary Scott Bessent said that he was instructed by Trump to open talks on tariffs. The update comes as Reuters reported that 50 countries have approached the US to seeks negotiations on tariffs.

President Trump said on Sunday that his new tariffs are the only way to fix major trade deficits with China and the European Union, declaring that duties will stay in place and investors must endure the consequences and that he would refrain from negotiating with China until the U.S. trade deficit is addressed.

He announced last week the implementation of a 10% universal import tariff, which came into effect April 5, with additional higher tariffs on major trade partners, including China, Vietnam, Japan, and the European Union, set to take effect on April 9.

In response to the U.S. tariffs, China has imposed matching 34% duties on American goods, further intensifying the trade conflict.

The European Union is also seeking unity among its member states to formulate a coordinated response, potentially leading to additional retaliatory measures.

These developments have heightened fears of a global trade war, with significant implications for international commerce and economic stability.

Goldman Sachs lifted on Sunday its odds of a 2025 recession to 45% from 35% a week ago, after hiking its recession forecast last week. This follows JPMorgan raising last week the probability of a global recession this year to 60%, from the previous 40%.

Wall Street fear gauge surges higher

Investors are showing signs of extreme nervousness, with the CBOE Volatility Index (VIX) - the most well-known measure of market sentiment - surged above 60 intraday, which its highest level since August last year. The index has given back some of these gains, but still traded close to 50 points.

The VIX’s futures curve has turned sharply inverted, signaling intense near-term market stress and a surge in demand for short-term hedging. The spread between the front-month and eight-month contracts has widened to levels not seen since the height of the COVID-19 crisis in 2020, according to Bloomberg data.

Markets are now fully pricing in five Fed rate cuts through 2025 as investors brace for a deeper economic shock. Treasury yields have dropped sharply, with demand rising on expectations of slowing growth.

Nvidia leads rebound amid dip-buying

Chips stocks including Nvidia (NASDAQ:NVDA) led the rebound as investors bought the recent dip.

Amazon (NASDAQ:AMZN) and Meta Platforms Inc (NASDAQ:META) rebounded from session lows to also help the broader market push higher.

Apple Inc (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA), however, continued to trade in the red. Tesla was also hurt by Wall Street downgrades after Wedbush cut its price target on the stock to $315 from $550, citing worries about a brand crisis and a tariff-led hit to demand.

"We now estimate Tesla has lost/destroyed at least 10% of its future customer base globally based on self created brand issues and this could be a conservative estimate. In Europe, this number could be 20% or higher....all self-inflicted by Musk," Wedbush said in a recent note.

Elsewhere, several auto stocks including Stellantis NV (NYSE:STLA), Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) added to recent losses after Bernstein put out a bearish view on auto stocks, downgrading the latter to underperform from market perform.

Bitcoin cuts some losses following Nov. 6 low, pushing crypto stocks lower

Bitcoin (BitfinexUSD) fell 0.6% to $78,405, rebounding from a low of $73,524, following the rebound in markets as tariff angst continued.

Still, the wild swings in bitcoin kept crypto stocks including Coinbase Global Inc (NASDAQ:COIN),and MicroStrategy Incorporated (NASDAQ:MSTR) in the red.

(Ayushman Ojha, Peter Nurse, Senad Karaahmetovic also contributed to this article.)

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