The US stock market is in turmoil: Wall Street plunges amid concerns over tariffs and recession

US stock indices closed Monday in the red, ending a session full of sharp fluctuations. Investors are anxiously watching signs of an economic slowdown and rising inflation risks, exacerbated by the aggressive trade rhetoric from the White House.

Trump doesn't back down: tariffs back in focus

The main trigger for the sell-off was a new wave of statements from President Donald Trump regarding the imposition of large tariffs. In his evening address on April 2, he announced plans to impose tariffs on all imports into the country, and for several key partners, raise the rates even higher.

Pressure on China intensifies

Not satisfied with the tariffs already in place, Trump promised to tighten sanctions on China. He announced the possibility of additional tariffs of up to 50%, which could more than double the overall tariff burden. This statement alarmed market participants, causing many to reassess their investment strategies.

Volatility soars, record volumes traded

Monday marked the second consecutive day of unusually high trading volumes on US stock exchanges. All three major indices—the S&P 500, the Dow Jones, and the Nasdaq—plummeted in the morning, reaching their lowest levels in more than a year. After an unexpected spike caused by the interpretation of tariff news, the market collapsed again, unable to withstand the pressure.

The fear indicator signals an alarm

The CBOE Volatility Index (VIX), often referred to as the Wall Street fear barometer, surpassed the psychological mark of 60 points during the session, the highest since August 2024. Although it later dropped slightly, the index closed at 46.98, the highest closing level in the past five years.

Investors are in panic: the Dow and the S&P fall, market loses trillions

Monday proved painful for Wall Street. The Dow Jones index dropped by 349 points, closing at 37,965.60, a decline of 0.91%. The broad S&P 500 index lost 11.83 points (–0.23%), falling to 5,062.25. Only the tech-heavy Nasdaq managed to stay afloat, adding a modest 0.10% and closing at 15,603.26.

The biggest plunge since 2020

The market has continued to suffer losses since the announcement of new tariffs. In the two trading days following Donald Trump's speech, the S&P 500 plummeted by 10.5%, and the overall market capitalization of companies dropped by about $5 trillion—this was the worst two-day result since the pandemic crash in March 2020.

The Dow is in correction, the Nasdaq is in bear mode

The market situation has entered a zone of concern: on Friday, the Dow confirmed its entry into correction territory, slumping more than 10% from its record highs in December. The tech-heavy Nasdaq plunged even further—its drop surpassed 20% from its historic peak, officially marking the beginning of a bear market.

Hopes for a breather are shattered

Monday morning started with a crash: the S&P 500 index collapsed by 20% from its previous record highs. However, unexpected news about a potential 90-day delay in imposing new tariffs caused a brief but sharp spike of more than 3%. Investors rushed to buy assets, hoping for a de-escalation of the conflict. These hopes quickly evaporated: White House officials officially denied the information, and the market went down again.

Real estate sector takes the biggest hit

The real estate sector was hit hardest on Monday: the sector index lost 2.4% on the day—the largest percentage decline among all 11 sectors of the S&P 500. Experts attribute the drop to rising market mortgage rates and overall uncertainty in the commercial real estate outlook amid economic upheavals.

Telecommunications and technology: rare beacons of light

Amid the overall pessimism, only two sectors managed to stay in the "green zone." Leading the Monday session were communication services, which gained 1%—the highest among all industries. The technology sector also slightly strengthened, rising by 0.3%—the second and only positive result following last week's heavy drop.

Apple and Tesla under Pressure, Nvidia and Amazon thrive

Among major corporations, sentiment was mixed. Apple continued to fall, losing 3.7%—investors were selling the stock, fearing a decline in demand. Tesla didn't fare better, with its stock dropping by 2.6%. At the same time, Nvidia surprised markets with a 3% rise, continuing its solid uptrend thanks to strong demand for chips. Amazon also pleased holders, gaining 2.5% on positive forecasts for e-commerce.

Europe seeks stability

European markets are recovering after a dizzying drop: the regional STOXX 600 index lost nearly 12% in just three days. However, by Tuesday morning, futures signaled a potential rebound, with more than a 3% jump. Despite this, investors remain cautious: memories of the sudden crash caused by Washington's tariff threats are still fresh.

The US market is longing for balance

Although Monday didn't bring joy, it served as a brief breather. After the rapid 10% slump over two days, the moderately negative close felt almost like a relief. However, investors continue to watch events with bated breath.

The fear indicator hits new highs

One of the main symbols of instability was the VIX, known as the "Wall Street thermometer of fear." On Monday, it surpassed 60 points—something that had only happened twice since the start of the COVID-19 pandemic. This level indicates high anxiety among market participants and unstable expectations for the future.

Asian turnaround: Japan leads the way

While Western markets digest the shock, Asian markets are showing signs of resilience. Japan, in particular, stands out, demonstrating notable growth and steady interest from investors despite global turbulence. The Land of the Rising Sun seems ready to play a role as a safe haven amid global economic chaos.

Trade rhetoric or strategy? Trump's tariffs — a possible prelude to negotiations

Amid tightening trade policies from Washington, there are early signs that the loud tariff threats may be just the start of more flexible diplomacy. This is evidenced by the fact that US Treasury Secretary Scott Bassett was appointed head of a delegation set to visit Tokyo in the coming days to discuss trade agreements. This could indicate that the White House is open to dialogue, despite the aggressive tone of recent statements.

Asia divides: Japan wins, Taiwan and Southeast Asia lose

Meanwhile, the geographical picture is becoming increasingly contrasting. Japan's TOPIX index soared by 6%, reflecting investor interest in stable economies. In sharp contrast, Taiwan saw its TWII index drop by 5% due to the 32% tariffs imposed on semiconductors, an essential export of the island.

Emerging Asian markets were hit particularly hard by the tariff pressure. Thailand's SETI index plummeted to its lowest levels in five years, and Indonesia's stock market, reopening after a week-long break, collapsed by 9%, while the rupiah hit historically weak levels. Export-dependent countries in the region found themselves at the epicenter of the turbulence.

Gold is back in vogue: flight to safe havens

Amid rising instability, investors are increasingly turning to gold as a safe haven. Although the price of the precious metal fell to its lowest point since March 13 on Monday, it began a solid recovery on Tuesday. The increased demand is attributed to fears of escalating the global trade war and a desire to preserve capital amid growing uncertainty.

All eyes on the Fed: markets await signals

Investors are eagerly awaiting the release of the Federal Reserve's meeting minutes, scheduled for Wednesday. These documents may shed light on the regulator's next steps, especially in terms of responding to geopolitical risks and tariff instability. Betting on gold and other "safe havens" may intensify if the Fed hints at potential policy adjustments in response to the ongoing situation.

Gold prices climb again: investors return to safe assets

Against the backdrop of geopolitical instability and market volatility, gold is once again the center of attention. By Tuesday morning (03:40 GMT), spot gold prices had risen by 0.5%, reaching $2,996.6 per ounce. This upward movement followed a brief drop when prices fell to their lowest point since March 13.

Futures rise faster: psychological barrier overcome

US gold futures showed even stronger growth: by Tuesday morning, they had jumped by 1.3%, surpassing $3,010.70 per ounce. This indicates that investors are actively hedging risks, factoring in potential further shocks to global markets.

Historic high still in sight

Although gold has retreated from its recent peak, analysts are still closely watching the trend. Just a week ago, on April 3, gold reached a historic record of $3,167.57 per ounce. The renewed interest in precious metals could signal growing concern in the financial community.

Other metals: mixed movements

Amid the rise in gold, other precious metals showed mixed dynamics. Silver saw a slight decline of 0.1%, settling at $30.09 per ounce. Platinum, on the other hand, strengthened by 1.3%, reaching $925.35. Palladium fell by 0.3%, dropping to $915.80.