S&P 500 on precipice of bear market

Wall Street weathered another chaotic day of trading on Monday as fears reports about a potential tariff reprieve briefly sent stocks sharply higher before concerns over the prospects of a severe economic downturn flooded back to the forefront.

- JOE RENNISON ESHE NELSON RIVER AKIRA DAVIS

The S&P 500 swung from a loss of as much as 4.7%, to a gain of as much as 3.4% in morning trading. Volatility surged. The CBOE Volatility Index, known as Wall Street’s fear gauge, rose to levels last seen during the pandemic-induced sell-off in March 2020.

By the early afternoon, the S&P 500 was unchanged and roughly 18% below its February peak. The index is on the precipice of a bear market — a rare marker of extreme market pessimism when stocks fall 20% from their peak.

“There’s no sign yet that markets are finding a bottom and beginning to sta-bilize,” analysts at Deutsche Bank wrote in a note.

The overarching concern for inves-tors hasn’t changed. Investors are worried that steep tariffs imposed by the United States on huge swaths of imports from China and other countries, will sink global growth and fuel inflation. The cause of Monday’s brief rally — a false report that President Trump is considering delaying new tariffs — showed just how desperate investors are for any sign that the White House is hearing their concerns.

Asked earlier in the day about the possibility of a 90-day pause on the expected tariffs announced by Trump last week, Kevin Hassett, the director of the National Economic Council, said on Fox News: “I think the president is going to decide what the president is going to decide.”

It appeared the comments, aired live, were then misinterpreted as Mr Hassett saying the president is considering a pause, before the false information gathered steam on social media.