Wall Street braced for more pain Monday, with major indexes pointing closer to bear market territory as investors reckoned with policy whiplash and the economic ripple effects of President Donald Trump’s tariffs.
Stocks are facing another week of “elevated uncertainty about tariffs, their duration, and the potential for more retaliation,” said Carol Schleif, chief market strategist at BMO Private Wealth in Minneapolis, noting that investors are puzzling through what makes sense under new tariff regimes.
“While the past few days in markets have been unsettling, market readjustments to unexpected events are often swift and brutal as traders search for a new floor and work new information into their models,” Schleif said Monday in comments emailed to The Washington Post. “This current volatility was exacerbated since stocks were trading at record highs and elevated valuations back in February heading into this market correction.”
Administration officials spent the weekend defending the Trump’s tariffs on nearly all U.S. trading partners after major Wall Street indexes tumbled Friday, when China announced an additional 34 percent in levies on U.S. goods — matching what Trump billed as his “Liberation Day” increase.
Tremors continued Monday in Europe as the European Union’s trade ministers gathered to formulate a response to the escalating trade war. Germany’s DAX fell by nearly 10 percent at the open before trimming losses, while the Stoxx 600 was down more than 4 percent.
The S&P 500 fell more than 3 percent at the opening bell, while the tech-heavy Nasdaq sank 3.9 percent. The Dow Jones Industrial Average, which contains a more narrow set of stocks was off about 3 percent.
The morning sell-off threatened to put all three indexes near or in bear market territory, meaning they are more than 20 percent below their recent highs. The S&P 500 closed Friday roughly 17 percent below its February high, while the Nasdaq is already firmly in bear market territory.
Larry Tentarelli, chief technical strategist for the Blue Chip Daily Report, warned investors to keep more cash on the sidelines amid the ongoing volatility. “There is no real blueprint to model current market conditions against,” Tentarelli said in a note.
This is a developing story and will be updated.
