Key Takeaways:
- A false rumor about a 90-day tariff pause briefly boosted US stocks by $2.5 trillion.
- Markets remain volatile as investors weigh binary outcomes from Trump’s trade policy.
- Mixed signals from the White House and advisers are deepening investor uncertainty.
- Experts warn that prolonged tariffs could structurally alter the US equity landscape.
Market Update: Tariff Turmoil Triggers Investor Paralysis on Wall Street
On Monday, a fleeting but impactful rumor that President Donald Trump would pause tariffs for 90 days briefly jolted the US stock market upwards. The rally, however, was short-lived—lasting all of seven minutes—before investors realized the report was unfounded.
Despite the reversal, selling did not resume with the same ferocity seen in the previous week, when the S&P 500 plunged 10% over just two days. Instead, major US indexes oscillated throughout the trading session, reflecting a deeper paralysis among investors grappling with the high-stakes nature of ongoing trade tensions.
At the heart of the issue is the binary nature of outcomes stemming from Trump’s tariff strategy. If tariffs remain in place, economists and analysts warn of a sharp economic slowdown and potential bear market territory for equities. Conversely, a reversal could reignite bullish momentum and push the S&P 500 back to record highs.
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, captured the mood succinctly:
“There’s no question that if Trump woke up tomorrow and said, ‘you know what? I’m not doing this,’ the markets would just move back to a new high.”
The fleeting rumor on Monday was enough to add an estimated $2.5 trillion in value to the stock market—highlighting how sensitive investors are to even the hint of a policy shift. For those who exited the market during last week’s steep sell-off, missing such a rally is a stark reminder of the risks in volatile environments.
But if Trump holds firm, analysts warn of deeper downside. Before any signs of potential relief, markets were clearly on a bear-market trajectory, making it increasingly difficult for traders to price in optimism.
Further complicating the picture is the inconsistency within the Trump administration itself. While some cabinet officials claim active negotiations are underway with 50 to 70 countries, White House trade adviser Peter Navarro has stated bluntly that “nothing is negotiable.”
President Trump has done little to clarify the messaging, stating Monday:
“There can be permanent tariffs and there can also be negotiations because there are things that we need beyond tariffs.”
This policy ambiguity has left investors without a clear playbook.
Alec Young, chief investment strategist at Mapsignals, summed up the growing frustration:
“Normally I’m paid to take advantage of this type of dislocation, but this is different just because of the cause. If this policy goes into effect and stays in place for years, it could structurally change the US stock market.”
As Wall Street attempts to navigate this unpredictable landscape, one thing remains clear: the fate of global markets is increasingly tethered to the next move—or tweet—from Washington.
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