On Monday, the U.S. stock market faced significant declines as fears surrounding impending tariffs loomed large. As President Donald Trump approaches his anticipated "Liberation Day" on April 2, his promise to implement extensive tariffs on trading partners has investors on edge. With heightened uncertainty, major indices struggled to maintain their footing in a volatile economic environment.
Stock Market Performance Amid Tariff Concerns
As of 10:10 AM Eastern Time, the market was reflecting the anxiety surrounding Trump’s tariff plans:
- The S&P 500 fell by 0.8%
- The Dow Jones Industrial Average decreased by 0.3%
- The Nasdaq Composite saw a more substantial dip of 1.7%
With these developments, Goldman Sachs has raised the likelihood of a U.S. recession to 35%, up from a previous estimate of 20%. The investment firm has also adjusted its year-end forecast for the S&P 500, anticipating further interest rate cuts from the Federal Reserve.
Bond Market and Treasury Yields
In the bond market, the yield on the 10-year Treasury note dropped to 4.21%, down from 4.27% at the close of trading on Friday. This shift reflects the growing investor concern and the search for safer assets amidst the tariff turmoil.
Major Stocks Show Mixed Results
Several large-cap companies experienced notable declines:
- Nvidia: down 5.3%
- Microsoft: off by 12.6%
- Tesla: decreased by 7%
The pharmaceutical sector also faced setbacks, particularly after reports emerged regarding the resignation of a high-ranking official at the FDA related to vaccine oversight. Notable losses included:
- Moderna: down 13%
- Pfizer: down 2.2%
Additionally, gene therapy firms like Taysha Gene Therapies and Solid Biosciences saw their shares tumble by 18.6% and 15.2%, respectively. In the airline industry, United Airlines shares fell by over 6.9% as Canadian travelers reconsidered trips to the U.S. due to the impending tariffs.
Gold and Precious Metals Surge
In response to the escalating trade war fears, gold prices surged to unprecedented levels. By 09:47 AM ET, spot gold had climbed 0.7% to $3,103.99 per ounce, even reaching a record high of $3,128.06 earlier in the session. U.S. gold futures mirrored this trend, rising by 0.7% to $3,136.10.
Other precious metals showed mixed results:
- Silver: down 1.7% to $33.53
- Platinum: decreased by 0.6% to $977.90
- Palladium: gained 0.2% to $973.68
Oil Prices Respond to Tariff Threats
Crude oil prices also saw an uptick due to concerns that supply could dwindle if Trump proceeds with his threats of imposing additional tariffs on Russian oil buyers. As of 10:50 AM EDT, Brent crude futures rose by $1.04 (or 1.4%) to $74.67 per barrel, while U.S. West Texas Intermediate crude increased by $1.69 (or 2.4%) to $71.05. In a recent statement, Trump expressed frustration towards Russian President Vladimir Putin, indicating he might impose secondary tariffs of 25%-50% on Russian oil buyers if he feels that Moscow is obstructing efforts to resolve the conflict in Ukraine.
As the situation develops, market watchers will be keenly observing the implications of Trump’s tariff strategy and its potential impacts on both the stock market and the broader economy.
