Highlights
Stocks dropped Monday in a risk-off move amid renewed fear of President Trump's trade war. The Dow Jones industrial average lost 1.7 percent, the broader S&P 500 fell 1.0 percent and the Nasdaq was down 1.1 percent. US Treasury yields declined in a flight from risk while oil prices were down and the dollar and the dollar was mixed but mostly weaker versus major currencies.
Investors have been rattled by fear of more global trade turmoil after the Supreme Court threw out much of Trump's tariff program, followed by Trump's threat to impose a new 15 percent across the board tariff. That drew a strong response from the European Union, which struck a deal for 10 percent tariffs after Trump's last round of threats. The other big negative for stocks Monday was the ongoing selloff in software and finance stocks in response to the view that AI technology will cannibalize much of their business.
Investors hoping for Federal Reserve rate cuts were disappointed with morning comments from Federal Reserve Governor Christopher Waller, seen as a supporter of cuts, who said the Fed's decision in March was a"coin toss" and that the job market may be stabilizing.
Big tech was mostly lower on the day amid rotation toward more defensive plays. Amazon, Meta, Microsoft, and Tesla were among the day's major decliners.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.