Markets Continue to Reel in Chaotic Monday Session

As far as trading sessions go on Wall Street, Monday’s was eventful.

Stocks whipsawed, initially falling, then rallying, then dropping again. Volatility spiked as Wall Street’s “fear index” flashed red. Rumours abounded before being officially decried as “fake news” and threats of further tariffs were made.

Let’s take a look at what’s happened over the last few days in more detail.

“Liberation Day”

“My fellow Americans, this is Liberation Day”

Last Wednesday, 2 April, US President Donald Trump stood in the White House Rose Garden and, using emergency powers, announced sweeping new tariffs against US trading partners. 

The new measures included a baseline 10% tariff on all imports into the US as well as higher duties on countries that have a particularly high trading deficit with Washington, the so-called “worst offenders”.

As had been widely expected, first in the firing line were the EU and China. However, in total, around 60 nations were singled out for higher tariffs, including Japan, South Korea, Madagascar, Vietnam and Moldova.

Thus, the world edged closer to a full-blown trade war and many economists sounded the alarm about a potential recession. The effect on the equity markets was swift, as investors sought to price in these concerns.

Global Stocks Slump

On Thursday, global stocks plummeted. On Friday, they plummeted again.

Over the course of the two days, the Dow Jones, S&P 500 and Nasdaq Composite slid by 9.3%, 10.5% and 11.4% respectively.

Across the Atlantic, the FTSE 100, DAX and CAC 40 recorded two-day losses of 6.4%, 7.8% and 7.4% respectively.

The Japanese Nikkei 225 fell by 5.4% over the two sessions.

On Thursday, the Shanghai Composite fell by a modest 0.2% whilst Hong Kong’s Hang Seng dropped 1.5%. Both were spared Friday’s losses as markets remained closed for a national holiday.

Market Volatility on Monday

After the weekend’s respite, markets reopened on Monday. In Asia and Europe, stocks began the week in the same manner as they had ended the previous.

The Nikkei 225 closed the session down 3.4%. The Shanghai Composite and Hang Seng, having missed Friday’s rout, closed Monday’s session down by a steep 7.3% and 13.2% respectively.

Then Wall Street opened, and the day turned strange.

As expected, US stocks opened significantly lower.

The CBOE Volatility Index (VIX), known as the “fear index”, which measures expected US market volatility, spiked above 60. For reference, a reading above 30 is typically considered high. 

Shortly after 10am, the stock market began to surge. A rumour was circulating that Trump was considering a 90-day pause on tariffs for all countries except China.  

However, the rally was short-lived. The White House quickly poured cold water on the report, seizing the opportunity to label it “fake news”. Stocks subsequently whipsawed, giving up their earlier gains.

Before the day was over, there had been threats from Trump of further tariffs against China, in response to Beijing’s decision to hit US exports with a reciprocal tariff of 34%.

“If that tariff isn’t removed by tomorrow at 12 o’clock, we’re putting a 50 per cent tariff on above the tariffs that we put on”

Despite the Monday madness, the S&P 500 and Nasdaq closed the session relatively flat, with a loss of 0.2% and a gain of 0.1% respectively. The Dow dropped 0.9% during the session.

Sell-Off Extends to Other Assets

It is not just stocks which have reacted negatively to Trump’s latest tariff announcements.

In the three sessions since Wednesday’s announcement, crude benchmarks Brent and WTI slid 14.3% and 14.6% on concerns about the fallout on global growth. Copper, typically seen as a bellwether of economic health, shed 14.8% over the three sessions.

Although the Dollar Index, which measures the greenback against a basket of foreign currencies, fell 1.6% on Thursday, it has recovered ground in the following sessions.

Even assets which are usually considered safe-havens have not been immune from the sell-off.

Gold prices have soared in 2025; however, the shiny metal has not avoided the fallout from Wednesday’s tariff announcements. In the following three sessions, gold prices fell 5.4%.

A similar reaction can be observed in US government bonds. US 10-Year Treasuries dropped 3.1% on Thursday and Friday last week. However, they recovered in yesterday’s trading.

The negative reaction in safe-haven assets suggests that some investors are choosing to shun anything except cold, hard cash.

What to Expect This Week

Despite Trump’s threats of further tariffs on Chinese goods, Beijing has remained steadfast today, vowing to “fight to the end” if Washington follows through with its threats.

This morning, Asian markets have recovered ground as optimism increases that Japan may be able to negotiate a deal with Washington over tariffs. Commodities have also started the session well on Tuesday morning.

For the rest of the week, the only certainty seems to be that there will continue to be uncertainty. Traders should expect volatility to remain elevated and to take necessary precautions if choosing to trade.

Remember, although increased volatility may present additional opportunities, it also significantly increases the risks associated with trading. For those already invested in the market, try to stay calm. Investors should try to remain rational and avoid making decisions based on fear.

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