Markets lurch on false Trump tariff pause report
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Market indicators are displayed on digital screen at the Euronext trading exchange building on April 7. Photo: Thomas SAMSON / AFP via Getty Images
Stocks swung dramatically Monday after a false report that the White House would pause most of President Trump's tariffs for 90 days.
Why it matters: The report caused a wild 8% swing in about 30 minutes that has little precedent in market history, moving potentially trillions of dollars in assets — a clear sign of how desperate people are for any sign of relief from Trump's looming tariff regime.
The latest: Stocks were mostly 2% to 4% lower Monday morning — until headlines crossed wire services and TV news suggesting Trump could pause the tariffs for all countries except China.
- The "headline" apparently came from one person's erroneous interpretation of a comment National Economic Council director Kevin Hassett made earlier in the day.
- The White House later told CNBC the report was "fake news" and stocks once again sold off.
- Over the course of the day, they rose and fell dramatically, particularly after Trump opened the door to talks with other countries, and as BlackRock CEO Larry Fink warned that CEOs believe the economy is already in recession.
- Ultimately the S&P 500 closed down 0.2%, the tech-heavy Nasdaq rose 0.1% and the small-cap benchmark Russell 2000 dropped about 1.5%.
- Those were tiny blips compared to the broad 4% losses in Europe and declines of 8% or more overnight in Asia.
The big picture: Investors have lost trillions of dollars since the April 2 tariff announcement. Recession odds are rising — and unlike past market crises, a coordinated policy response has been withheld thus far.
- In Trump's first term, markets could comfortably rely on the "Trump put," the idea that if they reacted badly enough, he'd reverse whatever policy caused the sell-off.
- The Trump put is now on life support.
- "I don't want anything to go down. But sometimes you have to take medicine to fix something," the president said Sunday night.
What they're saying: "The market has now priced in quite a bit of pain. Directionally, we believe most of our portfolio companies face ~5%-15% (earnings) headwinds from tariffs in isolation, assuming some pain is shared with customers and suppliers," Gabelli Funds portfolio manager John Belton said in a morning note.
What to watch: Just how bad it gets.
- Billionaire investor Bill Ackman, an outspoken Trump supporter, warned of "economic nuclear winter" if the tariffs were not paused immediately.
Editor's note: This story was updated with new developments.
