U.S. Stocks Seeing Substantial Volatility After Early Slump

After moving sharply lower early in the session, stocks have seen substantial volatility over the course of the trading day on Monday. The major averages have spent the day showing wild swings back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Dow is down 293.43 points or 0.8 percent at 38,021.43, the S&P 500 is up 0.97 points or less than a tenth of a percent at 5,075.05 and the Nasdaq is up 78.71 points or 0.5 percent at 15,666.50.

Stocks initially extended the sell-off seen over the two previous sessions amid ongoing concerns about the impact of President Donald Trump’s new tariffs and retaliatory moves by U.S. trade partners.

Selling pressure waned shortly after the start of trading, however, leading some traders to pick up stocks at reduced levels after the major averages hit their lowest intraday levels in over a year.

The S&P 500 also briefly joined the Nasdaq in bear market territory, plunging by more than 20 percent from its record closing high in February.

The subsequent rebound may also have reflected a headline indicating Trump is considering pausing new tariffs for 90 days, although the White House has since dismissed the report.

Trump also said in a Truth Social post that his administration is in talks with “countries from all over the world” and “tough but fair parameters are being set.”

Responding to the nosedive on Wall Street in remarks to reporters on Sunday, Trump said, “I don’t want anything to go down, but sometimes you have to take medicine to fix something.”

He added, “We have a trillion-dollar trade deficit with China, hundreds of billions of dollars a year we lose with China. And unless we solve that problem, I’m not going to make a deal.”

White House National Economic Council Director Kevin Hassett also defended the tariffs in an appearance on ABC’s “This Week” and claimed more than 50 countries have reached out to Trump to begin negotiations.

“Investors will be sitting on the edge of their seat waiting to see if anyone strikes a deal with Trump,” said Russ Mould, investment director at AJ Bell. “Tariff-related deals are likely to be high up the list of catalysts to drive a recovery in markets, and the next few weeks are going to be crucial in terms of getting a better idea of the new lay of the land.”

“Negotiations may not produce rapid results so there could be prolonged uncertainty and that spells heightened market volatility,” he added. “Trump will drive a hard bargain and won’t back down or soften the blow unless the US gets something big in return.”

Sector News

Semiconductor stocks have moved sharply higher over the course of the session, with the Philadelphia Semiconductor Index surging by 3.4 percent after hitting its lowest intraday level in well over a year.

Considerable strength has also emerged among computer hardware stocks, as reflected by the 2.4 percent jump by the NYSE Arca Computer Hardware Index.

Gold, networking and banking stocks have also shown strong moves to the upside, while significant weakness remains visible among pharmaceutical, housing and commercial real estate stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan’s Nikkei 225 Index plummeted by 7.8 percent, while Hong Kong’s Hang Seng Index nosedived by 13.2 percent.

The major European markets are also showing substantial moves to the downside. While the French CAC 40 Index is down by 4.0 percent, the U.K.’s FTSE 100 Index is down by 3.4 percent and the German DAX Index is down by 3.3 percent.

In the bond market, treasuries are pulling back after moving sharply higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 13.5 basis points at 4.126 percent.

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