Tariff Rumors Send U.S. Markets Into Volatile Frenzy/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street experienced extreme volatility Monday, with major indexes swinging from steep losses to massive gains and back again after false rumors circulated that President Trump might pause his tariffs. Markets briefly surged before a White House denial caused gains to evaporate. Global fears over a trade war and recession continue to unsettle investors.

Trump Tariff Rumors Shake Markets: Quick Looks
- S&P 500 plunged 4.7%, then surged 3.4%, then flattened midday.
- Dow lost 1,700 points before rebounding 900, ending down 272.
- Nasdaq saw gains as traders scrambled amid confusion.
- False rumor of Trump pausing tariffs triggered massive buying.
- White House quickly denied any pause plans, calling it “fake news.”
- Global stocks also hit hard; Hong Kong plunged 13.2%.
- Oil dropped below $60; Bitcoin fell under $80,000.
- JPMorgan CEO Dimon warns recession risk is rising.
- Fed faces limited flexibility due to high inflation.
Tariff Rumors Send U.S. Markets Into Volatile Frenzy
Deep Look
Wall Street Sees Wild Swings as Trump Tariff Rumors Whiplash Markets
Wall Street endured one of its most chaotic trading sessions in years on Monday as rumors swirled about President Donald Trump possibly pausing his aggressive tariff strategy. The result: dramatic swings across all major U.S. indexes as investors grasped for clarity amid mounting recession fears.
The S&P 500 — the benchmark index for most retirement and investment accounts — plunged 4.7% in early trading, echoing sharp global losses. Then, in a shocking turnaround, it surged 3.4% on rumors that Trump might hit pause on his recently imposed tariffs. But that hope was swiftly dashed when the White House issued a sharp denial on social media, calling the rumors “fake news.” The index returned to flat by midday.
The Dow Jones Industrial Average followed a similar rollercoaster trajectory, initially losing 1,700 points before bouncing nearly 900 points higher, only to settle back into the red with a 272-point loss, or 0.7%. The Nasdaq composite briefly turned positive, up 0.7%, showing that volatility touched every corner of the market.
False Rumors Spark Brief Rally
The rumor — that Trump would halt tariffs for 90 days to restart trade talks — was enough to send traders into a buying frenzy. But the rally vanished almost as quickly as it began. A White House post on X (formerly Twitter) crushed the hopes of a temporary reprieve, reaffirming Trump’s commitment to his trade policy.
The incident exposed just how fragile investor confidence is and how desperate markets are for any sign that trade tensions might ease.
“Markets are straining for any glimpse of hope that Trump might moderate his stance,” said Rintaro Nishimura, associate at the Asia Group. “This kind of rumor-driven volatility reflects the sheer uncertainty surrounding U.S. trade policy.”
Trump Unmoved Amid Market Panic
Despite the turbulence, Trump doubled down on his tariffs. In a Truth Social post, he urged Americans to “Be Strong, Courageous, and Patient, and GREATNESS will be the result!” He reiterated that the tariffs were designed to correct “abusive trade practices,” particularly from China, which he labeled “the biggest abuser of them all.”
Speaking aboard Air Force One on Sunday, Trump dismissed concerns about the market downturn. “Sometimes you have to take medicine to fix something,” he said.
The president also pressured the Federal Reserve to lower interest rates, a call that Fed Chair Jerome Powell met with caution. Powell warned that the tariffs could raise inflation and said the Fed was still assessing the long-term impact.
Economic Forecasts Turn Gloomy
Goldman Sachs issued a grim forecast, warning that a recession is becoming increasingly likely. The investment bank noted that even if tariffs are rolled back, the damage is already mounting: financial conditions are tightening, foreign consumer boycotts are growing, and policy uncertainty is discouraging business investment.
JPMorgan CEO Jamie Dimon also sounded the alarm. In his annual letter to shareholders, he cautioned that the new tariff regime would likely fuel inflation and drag down growth. “Whether or not the menu of tariffs causes a recession remains in question,” Dimon wrote, “but it will slow down growth.”
Global Shockwaves Intensify
Markets across the globe mirrored the turmoil in the U.S. In Hong Kong, stocks dropped 13.2% — their worst day since the 1997 Asian financial crisis. European and Asian indexes fell sharply as investors fled risky assets.
Oil prices also tumbled. U.S. benchmark crude briefly fell below $60 a barrel for the first time since 2021, reflecting expectations of weaker global demand. Bitcoin, which had remained relatively stable in prior sessions, slipped below $80,000 — well off its January record high above $100,000.
Federal Reserve’s Dilemma
The ongoing market chaos has placed the Federal Reserve in a difficult position. Historically, the Fed has acted swiftly during downturns — slashing interest rates and pumping liquidity into the system, as seen during the 2008 financial crisis and the 2020 COVID crash.
But conditions now are different. Inflation remains stubbornly high, limiting the Fed’s ability to cut rates without potentially worsening price increases. Investors, however, are still betting on at least four rate cuts this year, according to CME Group’s FedWatch tool.
What’s Next?
All signs point to continued volatility. The S&P 500 is now hovering near a 20% decline from its recent peak — the threshold that officially marks a bear market. It’s already suffered its worst week since the early days of the COVID pandemic in March 2020.
Nathan Thooft of Manulife Investment Management said he expects other countries to respond with retaliatory tariffs of their own, adding that any resolution to the current crisis could take months. “Market uncertainty and volatility are likely to persist for some time,” Thooft said.
The underlying driver of the turmoil remains clear: unpredictability. With every new headline, post, or rumor, markets swing wildly. For now, investors are left navigating a storm with no clear end in sight.
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