On Monday, April 7, 2025, global financial markets experience intense volatility as fears over escalating trade tensions and false information regarding U.S. tariff policy spark panic selling. The Dow Jones Industrial Average tumbles by nearly 1,500 points early in the trading day before briefly recovering and ultimately slipping again into red territory. The S&P 500 and Nasdaq Composite also decline significantly, dragged down by losses in major tech stocks like Apple, Nvidia, and Tesla.
The market swings are triggered by a report suggesting that President Donald Trump is considering a 90-day pause on newly announced tariffs—an assertion that briefly lifts investor sentiment and causes a midday rebound. However, the White House quickly rebukes the claim. Press Secretary Karoline Leavitt appears on CNBC, branding the report as “fake news,” and emphasizes that there is no shift in the administration’s trade strategy. The news organization that initially broke the story later retracts it, acknowledging the report was based on unconfirmed information and mischaracterized a comment made by National Economic Council Director Kevin Hassett.
President Trump reiterates his commitment to a hardline approach on tariffs, issuing a public ultimatum to China: lift your retaliatory 34% tariffs by April 8 or face an additional 50% tariff on Chinese imports. Trump also threatens to suspend all trade negotiations with Beijing if his demands are not met, further rattling global investors.
The Cboe Volatility Index (VIX), a widely watched measure of market fear, surges to 48.54—well above its long-term average of 19.5. Analysts warn that the spike is indicative of extreme investor anxiety, with levels comparable to those seen during previous financial crises.
European markets also slide, though leaders in Brussels express cautious optimism about resolving tariff disputes. EU officials signal a willingness to negotiate reciprocal reductions but make it clear they are prepared to retaliate if American tariffs are not rolled back. Japanese Prime Minister Fumio Kishida and Mexican President Claudia Sheinbaum issue joint statements urging continued trade dialogue to prevent global economic fallout.
Economists warn that the sustained tariff battle could have widespread consequences: elevated inflation, lower consumer spending, a slowdown in corporate investment, and increased odds of a global recession. JPMorgan and Goldman Sachs each revise their U.S. recession risk forecasts, now placing the probability at 60% and 45% respectively.
As Wall Street and global investors brace for further fallout, attention turns to whether diplomatic efforts can curb the escalating standoff. For now, uncertainty reigns, and markets remain on edge.
Source Links:
https://www.investors.com/market-trend/stock-market-today/dow-jones-sp500-nasdaq-trump-tariff-apple-aapl-nvda-tsla
https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-07-25/card/cnbc-says-it-aired-unconfirmed-information-in-reporting-on-tariff-pause-jsT3kPKjY3FMjlRppuzt
https://www.theguardian.com/us-news/live/2025/apr/07/donald-trump-tariffs-foreign-governments-markets-fall-netanyahu-white-house-us-politics-latest-updates-news
https://www.marketwatch.com/story/wall-streets-fear-gauge-soars-to-a-rare-crisis-level-what-that-means-for-stocks-56605852
https://nypost.com/2025/04/07/business/us-stocks-nosedive-with-sampp-500-entering-bear-territory
https://youtu.be/lgmu8tm8ai0
