U.S. Stock Market Plunges Amid Tariff Turmoil

April 7, 2025, 12:22 PM PDT – The U.S. stock market faced a tumultuous start to the week, shedding over $2.1 trillion in value at the opening bell on Monday, April 7, 2025. This sharp decline, reported by Reuters, marks a continuation of the volatility that has gripped Wall Street since President Donald Trump unveiled sweeping tariffs last week, rattling investors and stoking fears of a global economic downturn ("S&P 500 loses $5 trillion in two days in Trump tariff selloff," Reuters, April 4, 2025).

The market’s rollercoaster ride was intensified by a fleeting rumor of a 90-day tariff pause, which briefly lifted stocks before being swiftly debunked by the White House as "fake news." According to Yahoo Finance, the false report—initially tied to White House economic adviser Kevin Hassett—sparked a dramatic $7 trillion swing in the S&P 500 within 30 minutes, only for gains to evaporate once the administration clarified its stance ("Trump tariffs live updates: Trump threatens additional tariffs on China, markets remain jittery," Yahoo Finance, April 7, 2025). A White House spokesperson reiterated the denial on X, dismissing the speculation and reaffirming Trump’s commitment to his tariff agenda.

Adding fuel to the fire, President Trump escalated tensions with China, threatening to impose an additional 50% tariff on Chinese goods if Beijing does not retract its retaliatory 34% tariff increase by Tuesday, April 8, 2025. In a post 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,” a move that could push U.S. tariffs on China to a staggering 104% ("Trump tariffs live updates," Yahoo Finance, April 7, 2025). China’s initial 34% tariff hike, announced last Friday, was itself a response to Trump’s earlier 34% levy on Chinese imports, signaling a tit-for-tat escalation that has unnerved global markets ("Stocks slump again after China fires back in trade war with tariffs on US goods," Reuters, April 4, 2025).

The fallout has been swift and severe. The S&P 500 teetered on the edge of bear market territory early Monday, while the Nasdaq Composite has already confirmed a bear market, down 21% from its December peak ("Trading Day: Trump tariffs wipe $5 trillion off Wall Street," Reuters, April 4, 2025). Investors, grappling with the specter of a trade war spiral, have fled to safe-haven assets like U.S. Treasuries and gold, with the latter hitting a record high above $3,160 an ounce before easing slightly ("US stocks post biggest drop since 2020, dollar falls as Trump tariffs fuel recession fears," Reuters, April 3, 2025).

Analysts warn that the U.S.-China standoff could have profound implications for global trade and economic stability. “This is how you sabotage the world’s economic engine while claiming to supercharge it,” Nigel Green, CEO of deVere Group, told Reuters, echoing a growing chorus of concern ("US stocks post biggest drop since 2020," Reuters, April 3, 2025). JPMorgan has raised its recession odds to 60%, citing the tariffs as a “substantial macroeconomic shock” that could tip the U.S.—and potentially the world—into a downturn by year-end ("S&P 500 loses $5 trillion in two days," Reuters, April 4, 2025).

As markets brace for further volatility, Trump’s hardline stance shows no signs of softening. The White House touted early “wins” from the tariffs, pointing to announcements from automakers like Nissan and General Motors to maintain or boost U.S. production ("Trump tariffs fallout: China retaliates, Vietnam talks, U.S. markets melt down," CNBC, April 4, 2025).

Yet, with China vowing countermeasures and other nations like the EU and Canada preparing retaliatory tariffs, the path ahead remains fraught with uncertainty. For now, investors and global leaders alike are left watching Washington and Beijing, hoping to avoid what one strategist called a “tariff spiral of doom” ("Trump tariffs slam markets, stunned investors brace for slow growth, retaliation," Reuters, April 3, 2025). 17GEN4.com