Wall Street ended Monday’s session (Tuesday AEST) on a turbulent note, as markets remained under pressure amid renewed trade tensions between the United States and China.
The day’s trading saw historic volatility, with the Dow Jones Industrial Average logging its largest intraday point swing ever recorded, while the CBOE Volatility Index (VIX), commonly referred to as Wall Street’s “fear gauge”, spiking to the 60 level - an extreme reading typically observed during bear markets.
The Dow fell 349.3 points, or 0.9%, to close at 37,965.6. The S&P 500 eased 0.2% to finish at 5,062.3, having briefly dipped into bear market territory during the day. The Nasdaq Composite inched higher by 0.1% to settle at 15,603.3, supported by buying in tech stocks including Nvidia and Palantir, which added 3.5% and 5.2%, respectively.
Investor sentiment remained fragile following fresh tariff threats from former President Donald Trump. Posting on Truth Social, Trump warned: “If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose additional tariffs on China of 50%, effective April 9th.
"Additionally, all talks with China concerning their requested meetings with us will be terminated!”
Despite escalating tensions, the White House reiterated that the recently announced tariffs would proceed as planned on April 9. China responded with its own retaliatory measures last Friday, while several other nations are reportedly preparing similar moves.
Trump also claimed that at least 50 countries have initiated trade discussions with the U.S. Vietnam, for example, has offered to reduce tariffs on American goods to zero. Still, White House trade adviser Peter Navarro expressed scepticism, telling CNBC, “It’s the non-tariff cheating that matters.”
Amid the heightened uncertainty, market activity surged. Monday’s trading volume hit approximately 29 billion shares, surpassing both Friday’s 26.77 billion and the 10-day average of 16.94 billion. It marked the busiest trading day in at least 18 years.
In the bond markets, yields moved sharply higher. The 10-year Treasury note rose 5.1% to 4.203%, while the 2-year yield climbed 4% to 3.788%.
