Wall Street entered a third day of roller-coasting trading following President Trump’s decision to impose massive reciprocal tariffs over trade imbalances and his weekend refusal to back off the plan.
The Dow Jones Industrial Average dropped 1,300, or 3.5%, rebounded briefly, then turned negative again — all within the first hour of trading.
The S&P 500 saw a similar trend of downward spiraling followed by a positive rebound, perhaps ameliorating fears it was headed for bear market territory.
The market seemed to rebound based on reports that the White House could be considering a 90-day pause on tariffs.
Yet White House press secretary Karoline Leavitt, reposting a tweet from the White House response team, said any reports about a pause are “FAKE NEWS.”
Investors are coming to terms with Mr. Trump’s decision to impose 10% tariffs on all imports and huge levies on countries like China and Vietnam, allies in Europe and even smaller nations in Africa.
SEE ALSO: Trump promotes tariffs, tells elected officials don’t be a ‘panican’
The scale of the tariffs seemed to catch investors off guard, leading to a sell-off on Thursday and Friday and widespread uncertainty at the start of this week.
Tariffs are a tax or duty paid by importers on the goods they bring in from foreign markets.
Mr. Trump says Americans shouldn’t panic. He says the tariffs are a great way to force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.
“Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!). Be Strong, Courageous, and Patient, and GREATNESS will be the result!” Mr. Trump posted Monday on Truth Social.
Business leaders who have been friendly to Mr. Trump are starting to question the White House’s approach to the tariffs. They were caught off-guard by formulas that assigned new tariffs based on trade imbalances in what the U.S. buys from other countries versus what those nations buy from American producers, rather than actual tariffs or trade barriers.
Some financial professionals said Mr. Trump would be better off delays massive reciprocal tariffs while he tried to negotiate better terms with other nations.
Mr. Trump said people need to sit tight, citing productive calls with Japan, Vietnam and other nation. Bangladesh, for instance, asked for a three-month delay in tariffs while it looked for ways to increase U.S. exports to their country.
“Countries from all over the World are talking to us. Tough but fair parameters are being set. Spoke to the Japanese Prime Minister this morning. He is sending a top team to negotiate!” Mr. Trump posted.
