Volatility grips global stock markets as Trump insists on tariff ‘medicine’

Extreme volatility plagued global stock markets on Monday, with Wall Street swinging in and out of the red as Donald Trump defied stark warnings that his global trade assault will wreak widespread economic damage, comparing new US tariffs to medicine.

On Wall Street, the benchmark S&P 500 dropped by as much as 4.1% – entering bear market territory after falling more than 20% from its most recent peak, in February – before launching an extraordinary reversal to turn positive.

While markets were fleetingly boosted after Kevin Hassett, director of the White House national economic council, signaled that Trump was open to considering a 90-day pause on tariffs for all countries but China, the relief didn’t last long. By mid-morning, the S&P had lost all its gains and was trading down 1.4%.

As the turmoil headed into a second week, the Dow Jones industrial average was down 1.5%.

The FTSE 100 shed 2.4% in London, after the Nikkei 225 slumped 7.8% in Tokyo.

Trump, who has previously used market rallies as a barometer of his success, tried to brush off the sell-off this weekend. “I don’t want anything to go down,” the US president said on Sunday. “But sometimes you have to take medicine to fix something.”

He stood firm on Monday. “The United States has a chance to do something that should have been done DECADES AGO,” Trump wrote on his Truth Social platform. “Don’t be Weak! Don’t be Stupid!”

Major share indices have fallen dramatically since he unveiled his controversial plan to overhaul the US economy last week. The Trump administration imposed a blanket 10% tariff on imported goods this weekend, and is set to follow with higher tariffs on products from specific nations from Wednesday.

While senior figures in corporate America have been reluctant to criticize Trump since his inauguration in January, a handful have started to sound the alarm in recent days.

The JPMorgan Chase boss, Jamie Dimon, one of the most influential executives on Wall Street, warned on Monday that Trump’s tariff plan was “likely” to exacerbate inflation. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” he wrote in his annual letter to shareholders.

Dimon added: “The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse.”

The billionaire fund manager Bill Ackman, who backed Trump’s campaign for the presidency, has also demanded the administration reconsider its plan. “We are heading for a self-induced, economic nuclear winter,” he wrote on X, formerly Twitter.

Peter Navarro, Trump’s top trade adviser, insisted in a television interview on Monday morning that the market would find a bottom. Less than hour later, when New York opened for trading, and the search continued.

The technology-focused Nasdaq Composite started the day down 4.3%, before briefly turning positive. By mid-morning, it was down 0.7%. The VIX “fear index” of volatility rose as high as 60 for the first time since August.

Oil prices also came under pressure, with Brent and WTI benchmarks stooping to their lowest levels in four years, as growing economic tensions between Washington and Beijing stoked fears that a global downturn would challenge demand.