U.S. stocks decline again as Trump holds tightly to tariffs

· UPI

April 7 (UPI) -- U.S. markets broadly declined Monday, but not as significantly as during the past two trading sessions, as President Donald Trump publicly held firm to the concept that his levies will lead to economic prosperity.

The indexes fluctuated wildly as investors speculated whether the president would pause or change the tariffs. Trading volume on the Down Jones Industrials, which at one time was in positive territory, hit its highest level in at least 18 years: 29 billion shares.

Futures at 8 p.m. were higher, including up 7.73% in DJIA, 1.36% Standard and Poor's 500 and 1.48% Nasdaq Composite.

At the 4 p.m. close Monday, DJIA declined 349.26 points, or 0.91%, to close at 37,965.60. The 30 stocks had fallen more than 1,700 points during a low Monday.

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On Friday, the DJIA declined 2,2331.07, or 5.5%, to 38,314.86, the worst setback since the Covid-19 pandemic in March 2020 and the lowest for the average since May 30, 2024. The average was last under 40,000 on Aug. 13. It hit 45,014 on Dec 4, so it is 15.7% down since then.

The S&P 500 lost 11.23, or 0.23%, to end at 5,062.25 and was down 4.7% at the lows of the session. It briefly entered bear market territory, which is down, but ended nearly 18% from its record high of 61,47.43 in February.

The tech-heavy Nasdaq went slightly up 15.48 points, or 0.10%, to settle at 15,603.26. The index went into a bear market on Friday for the first time since 2022 and is down 22.9% from a record high of 20173.89 on Dec. 16.

The 10-year Treasury yield was at 4.23% Friday, a rise of 0.212%, as investors made safety grabs of bonds, which lowered rates and lifted prices.

West Texas Intermediate Crude for May was unchanged at $60.7 a barrel, reflecting energy traders' concerns fuel demand will decline. The last time it was under $60 was in April 2021.

And gold was trading at $2,976.60, which was unchanged as investors look to metals amid uncertainty about tariffs and the economy. The record was 3,166 on Wednesday.

Analysts' reaction

Wall Street's fear index, called the Cboe Volatility Index, or VIX, closed at 46.98. The VIX increased 3.7% after soaring 50.9% on Friday, the highest level since the Covid-19 pandemic.

"The only times since 1990 with a VIX at similar readings were in the depths of the 2008 and 2020 Financial and Pandemic Crises," Nicholas Colas, co-founder of DataTrek, wrote in a note Monday.

Goldman Sachs' analysts raised the odds of a recession to 45%.

"The combination of larger tariffs, greater policy uncertainty, declining business and consumer confidence, and messaging from the administration indicating greater willingness to tolerate near-term economic weakness in pursuit of its policies increase downside risk," Goldman analysts said in a report.

Treasury Secretary Scott Bessent told NBC's Kristen Welk on Meet the Press Sunday: "I see no reason that we have to prove in a recession. What we're looking at is building the long-term economic fundamentals for prosperity."4

"There is more noise than news today, and investors should avoid trying to tie every tick in the [S&P 500] to a headline," equity analyst Adam Crisafulli, head of Vital Knowledge, said in a report obtained by CBS News. "In the immediate term, the velocity of the recent slump is unsustainable, which will leave equities vulnerable to sharp rebounds."

Bill Ackman, billionaire head of Pershing Square, on X, posted: "The president is losing the confidence of business leaders around the globe...this is not what we voted for. "The President has an opportunity on Monday to call a time out and have the time to execute on fixing an unfair tariff system. Alternatively, we are heading for a self-induced, economic nuclear winter, and we should start hunkering down."

Trump posted to social media Monday that as China has issued 34% retaliatory tariffs against the U.S., in addition to "their already record setting tariffs, non-monetary tariffs, illegal subsidization of companies, and massive long term currency manipulation" despite his "warning that any country that retaliates against the U.S. by issuing additional tariffs, above and beyond their already existing long term tariff abuse of our nation, will be immediately met with new and substantially higher tariffs."

He continued that "if China does not withdraw its 34% increase above their already long term trading abuses by" Tuesday, "the United States will impose additional tariffs on China of 50%" effective Wednesday, and that "all talks with China concerning their requested meetings with us will be terminated."

That post to Trump's Truth Social account was at approximately 11:14 a.m., and by 11:30 a.m. the Dow had dropped back to 37, 277. 66.

Market sectors

Most sectors, including construction, energy, financials, health, industrials, materials, real estate and utilities, declined. Up were technology and communications services.

The stock price of Apple, which makes computers and cellphones in China, fell another 3.67% after dropping 7.29 Friday.

Nike, which depends on international supply chains and imports from Vietnam, was down 2.86% after trading up 3% Fridat.

Auto stocks also dropped as 46% of cars sold in the United States come from other nations.

Tesla, which makes most of its cars in the United States but imports parts, was down 3.562% to 233.29. It was more than double that amount on Dec. 17 with a record 479.86.

Ford, which makes fewer cars outside the U.S. than other major companies, declined 3.55% after rising 0.42% Friday.

General Motors was down 1.47% and Stellantis 4.73%.

Stellantis, the parent company of Chrysler and Dodge, also owns foreign brands like Jeep, Ram, Alfa Romeo, Fiat, and Maserati.