Uncertainty Over Tariffs Leads to Wild Swings in Markets

As the largest retailer in the United States, Walmart relies on suppliers from around the world. And for the Wall Street analysts who attended the event in Dallas on Wednesday, tariffs were top of mind.

Doug McMillon, Walmart’s chief executive, acknowledged the uncertainty. In response to one of several questions from analysts about tariffs, he said: “There’s so many variables playing out in terms of what costs are going to be, where people source from. We’re going have to manage this as we always do, daily.”

Or by the minute.

As the event got underway on Wednesday, the United States had imposed worldwide tariffs, including a levy of 104 percent on Chinese goods, and China quickly retaliated with 84 percent tariffs on U.S. goods. Mr. McMillon, speaking just after Beijing’s additional tariffs went into effect, said the situation was “very fluid.” In fact, not long after Mr. McMillon’s question-and-answer session with analysts, President Trump said he was pausing his worldwide reciprocal tariffs for 90 days and raising the rate on China to 125 percent.

During the session, Mr. McMillon emphasized that Walmart was well placed to cope with uncertainty, having navigated “the period after 9/11, the global financial crisis, a pandemic and more recently high inflation.” Walmart’s customer base includes a large number of lower-income shoppers, who have less capacity to absorb the higher prices that the tariffs could bring.

John David Rainey, Walmart’s chief financial officer, emphasized that two-thirds of what Walmart sells in the United States is made, grown or assembled domestically; the figure includes groceries, which generally have lower margins. The other third of what Walmart sells comes from all over the world, especially from China and Mexico, he said.

Mr. Rainey said the tariffs had made it harder for Walmart to predict its first-quarter operating income growth. “We’re one week into this new tariff environment, and we’re still working through what this means for us,” he said. “For the current quarter, the uncertainty and decline in consumer sentiment has led to a little more sales volatility week to week and, frankly, day to day.”

Walmart reiterated expectations for first-quarter sales growth of about 3 to 4 percent and said its annual sales growth guidance remained unchanged, with customers still expected to migrate toward e-commerce and delivery, key parts of Walmart’s strategy. Walmart will report its first-quarter results on May 15.

Mr. Bolten’s statement was the fourth time this year the group commented on the threat of new tariffs against the country’s major trading partners.

On March 12, the Business Roundtable’s survey of 150 chief executives, polled in late February and early March when Mr. Trump threatened tariffs against Canada and Mexico, showed growing pessimism about the United States’ economic outlook. The survey, called the Business Roundtable C.E.O. Economic Outlook Index, fell in the first quarter to 7 points, roughly where it was in mid-2024. Expectations for hiring, capital investment and sales all fell.

Chuck Robbins, the chair of the group and the chief executive of Cisco, said last month that not all tariffs were harmful, but that businesses wanted certainty about the levies so they could adapt if needed.

“Markets want clarity,” he said in an interview with Punchbowl News. “Companies want clarity, and the fear is that companies begin to do the classic, you know, ‘I’m just going to pause investments now until we understand this a little bit better.’”

The European Union offered Monday to drop its tariffs on American cars and industrial goods to zero if the United States did the same. But Mr. Navarro criticized the bloc for its value-added taxes and restrictions on American meat exports, as well as systematically higher tariffs.

“You steal from the American people every which way is possible,” Mr. Navarro said. “So, don’t just say we’re going to lower our tariffs.”

Mr. Navarro also targeted Vietnam, which has appealed to the president in recent days to have its tariffs reduced. He accused Vietnam of dumping products into U.S. markets, engaging in intellectual property theft and killing industries like shrimp, kitchen cabinets and others.

“When they come to us and say, we’ll go to zero tariffs, that means nothing to us, because it’s the non-tariff cheating that matters,” Mr. Navarro said.

But Treasury Secretary Scott Bessent, who, with Jamieson Greer, the United States trade representative, was put in charge of negotiations with Japan, signaled in an interview later in the day that Mr. Trump is ready to negotiate.

“President Trump, as you know, is better than anyone at giving himself maximum leverage,” he said.

Mr. Bessent said he had suggested that foreign officials “keep your cool, do not escalate and come to us with your offers.” He added: “And at a point, President Trump will be ready to negotiate.”

In the CNBC interview in the morning, Mr. Navarro said that tax cuts were forthcoming, as well as other benefits for Americans, like deregulation, lower energy prices, lower interest rates and the restructuring of manufacturing.

“We’re going to get to a place where America makes stuff again, real wages are going to be up, profits are going to be up,” he said, adding, “the market’s going to find a bottom.” Stock markets closed slightly lower Monday, following two days of punishing losses last week.

He was also asked about Elon Musk’s very public criticism of tariffs and of Mr. Navarro specifically over the weekend. Responding to a social-media post praising Mr. Navarro, Mr. Musk on Saturday mocked Mr. Navarro’s Ivy League degree as useless, and then said Mr. Navarro had not “built” anything.

On Monday, Mr. Navarro said that Mr. Musk was “not a car manufacturer” but “a car assembler,” mentioning that Tesla’s plant in Texas imported batteries, electronics, tires and other parts. “He wants the cheap foreign parts, and we understand that,” he said.

Copper prices surged this year, and reached a high after Mr. Trump said his administration was investigating whether tariffs might be necessary to reduce the United States’ reliance on copper imports. Copper buyers rushed to purchase the metal before any tariffs took effect.

Then last week, Mr. Trump imposed “reciprocal” tariffs on most countries, terrifying many investors and business executives because of the tariffs’ potential to sharply slow the economy and perhaps even cause a recession. As a result, copper prices plunged, and are now down nearly 20 percent from last month’s high.

“With growth in the U.S. likely to slow on the back of tariffs, and China already struggling to revive its economy, demand for copper and other industrial metals is likely to weaken,” said Ewa Manthey, a commodities strategist at ING.

Copper is used widely, including in cars, appliances, electronics and many industries that produce and consume electricity. Last year, the United States imported about half the copper it used, excluding scrap, according to ING.

Prices of other metals are also under pressure.

Mr. Trump’s 25 percent tariff on steel and aluminum imports went into effect last month. But the prices of these metals have weakened in recent days as fears of a recession have intensified. The prices of “hot rolled coil” steel have fallen more than 10 percent since last month, and aluminum is down nearly 15 percent.

“If trade tensions intensify and we see more retaliatory measures, this will add to the bearish sentiment for industrial metals,” Ms. Manthey said.

Separately, the Trump administration said on Monday that it would conduct a new national security review of the proposed acquisition of U.S. Steel by Nippon Steel, a Japanese steel producer. The Biden administration had performed its own review and blocked the deal in January.

In a statement on Monday, U.S. Steel said, “We look forward to continuing to work closely with President Trump and his administration to finalize this significant and important investment, which will preserve existing jobs, create new jobs, enhance national security and secure a bright future for American manufacturing.”

“We’re not looking at that,” Mr. Trump said, when asked about a possible pause on his tariffs. “We’re going to have one shot at this and no other president is going to do what I’m doing.”

Mr. Trump began the day by drawing new battle lines over his so-called reciprocal tariffs, which he plans to impose on certain countries after midnight on Wednesday. The taxes, which can reach as high as 46 percent for some nations, will snap into effect just days after the president imposed a minimum 10 percent levy on nearly every U.S. trading partner.

Mr. Trump specifically targeted China, which announced last week it would match the United States by imposing a retaliatory 34 percent tax on imports from America. In a post on Truth Social, the president demanded that Beijing rescind its retribution or face an additional 50 percent U.S. tariff beginning April 9. He also threatened to halt any further negotiations.

The escalation could bring the U.S. tariff on Chinese goods to 104 percent, though for some products, the rate is likely to be much higher because of levies that date back to Mr. Trump’s first term. Taken together, it could prove costly for importers bringing in clothing, cellphones, chemicals and machinery from China. American consumers last year bought $440 billion of goods from China, making it the second-largest source of U.S. imports after Mexico.

Mr. Trump coupled his ultimatum to China with a pledge to issue punishing, additional tariffs on other U.S. trading partners if they similarly try to rebuff his policies. But his attacks did not appear to dissuade some opponents, including the European Union, where officials prepared to circulate a list of U.S. products that they could soon subject to retaliation.

With global tensions rising, Mr. Trump’s strategy triggered another day of unease on Wall Street. The S&P 500 fell 0.2 percent, now almost 18 percent below its mid-February peak. The tech-heavy Nasdaq Composite index, which also saw dramatic swings throughout the day, ended slightly higher.

In a sign of investor frustration over the tariffs, an erroneous news report earlier in the day, suggesting that the president might pause his trade war, sparked an immediate rally — only to see stocks just as quickly plummet again, after the White House made clear no such pause was in the offing.

Still, administration officials appeared to leave open the door for negotiations that could ultimately defuse the trade war, citing the fact that more than 50 countries — including, most recently, Israel, Japan and Vietnam — had approached the U.S. government in recent days to strike deals. After visiting with the president at the White House, Israeli Prime Minister Benjamin Netanyahu pledged Monday that his country would “eliminate the trade deficit with the United States,” while reducing other trade barriers “fairly quickly.”

But White House officials have sought to set a high bar for what the president is willing to accept, marking a shift in tone after Mr. Trump and his aides initially signaled they would not haggle over tariffs at all.

“If they come to us with really great deals that advantage American manufacturing and American farmers, I’m sure he’ll listen,” Kevin Hassett, the director of the White House National Economic Council, said in an interview on Fox News.

Mr. Hassett said some nations had proposed “some deals that are great,” but added of the president: “After decades and decades of mistreating American workers, it’s going to be tough to get him to decide to really come to the table and sign on the dotted line.”

Peter Navarro, a senior White House trade adviser, specifically said that other nations needed to do more than lower their own tariffs to secure relief from the United States. Appearing on CNBC, he cited a need to reduce “cheating” and other barriers that restrict American goods in foreign markets.

And Stephen Miran, the head of the White House Council of Economic Advisers, said offers by foreign countries “would be welcomed by the United States.” He added at an event in Washington that the president had been “very clear that we want increased access to foreign markets that would boost our exports.”

With seemingly no end to the trade war in sight, economists once again were left to grapple with the prospect that high tariffs could raise prices on consumers, slow U.S. growth and tip the country into a recession. Tariffs are taxes on imports, which businesses may struggle to afford, potentially resulting in those firms passing on the new costs to customers.

Jay Foreman, the chief executive of toy company Basic Fun, called the president’s new threat against China “unhinged.”

Mr. Foreman said he had just initiated a complete hold on all shipments of his products from Asia. “I cannot risk putting any product on the water that might incur, at this point, a 54 percent to 104 percent tariff,” he said. “It’s one thing to try to absorb or pass along 10 percent to 20 percent, but 54 percent to 104 percent, it’s impossible. The consumer will just shut down.”

Jeanna Smialek and Danielle Kaye contributed reporting.

But in a sign of the precarious nature of the markets right now, an unsubstantiated online report spiked shares sharply, albeit briefly, and continued to climb after CNBC and Reuters relayed the claim. The White House quickly responded saying that the report was “FAKE NEWS,” and CNBC and Reuters issued statements correcting the record.

Stocks fell back down after those corrections. Still, the fallout continued to reverberate on Monday, and became a cautionary tale of the risk of using information drawn from the fast-moving echo chamber of social media without first confirming the news independently.

Asked earlier in the day about the possibility of a pause on imposing the expansive tariffs announced by President 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.”

Walter Bloomberg, an influential X account that is unaffiliated with Bloomberg News, amplified a post on social media claiming Mr. Hassett had said Mr. Trump was considering a 90-day pause in tariffs.

Minutes after the Walter Bloomberg account’s post, Carl Quintanilla, a CNBC anchor, read a headline on air echoing the reports about Hassett. “I think we can go with this headline,” Mr. Quintanilla said, without attributing the news. A person with knowledge of the editorial process at the network said Mr. Quintanilla had read a CNBC headline that was circulated prematurely by mistake.

After that, Reuters flashed a headline, citing CNBC.

The Walter Bloomberg account later deleted the post. In a direct message on X, the account said to The New York Times that the post had originated minutes earlier from another X account. “Given the market movement — plus 4.5 percent — I deemed the headline reliable and posted it at 10:13,” the Walter Bloomberg account said in the direct message. “A few minutes later, Reuters picked up the story, citing CNBC.”

CNBC issued a correction soon after mentioning the potential pause, saying its “aired unconfirmed information in a banner,” adding that its reporters “quickly made a correction on air.” Reuters also issued a correction, saying its report relied on a headline from CNBC. “Reuters has withdrawn the incorrect report and regrets its error,” it said in a statement.

Muhammad Yunus, Bangladesh’s interim leader, wrote on Facebook that if granted, Bangladesh would use the three months “to substantially increase US exports to Bangladesh.” Mr. Yunus said that he had promised Mr. Trump in the letter that Bangladesh would “take all necessary actions to fully support your trade agenda.”

Mohiuddin Rubel, the director of a Bangladeshi trade association, said that American “buyers have already requested that shipments be put on hold until further notice,” and that some are trying to force their suppliers in Bangladesh to absorb the costs. The industry employs roughly four million people in the world’s 10th most populous country.

More than 80 percent of Bangladesh’s exports are ready-made garments. Until this week, the United States was buying almost half.

Kevin Hassett, the head of the White House National Economic Council, said on Sunday that the White House had received offers from about 50 countries interested in making deals to ease Mr. Trump’s expansive tariffs. But Mr. Hassett sought to set a high bar for the sort of deal that the administration would be willing to accept.

“After decades and decades of mistreating American workers, it’s going to be tough to get him to decide to really come to the table and sign on the dotted line,” he said of the president.

Tony Romm contributed to this report.

Here is what to know about a bear market.

What is a bear market?

A bear market is a Wall Street term for a sustained market downturn, when a stock index closes 20 percent from its last peak.

The 20 percent threshold signals investor pessimism about the future of the economy.

Are we in a bear market now?

The S&P 500, the benchmark U.S. stock index, was poised to open lower on Wednesday. The index was already down 18.9 percent from its last high, on Feb. 19, and if it closes on Wednesday with a loss of at least 1.4 percent from Tuesday’s close, that would tip it into a bear market.

The S&P 500 has tumbled more than 12 percent in the days since Mr. Trump announced his new tariffs.

Analysts at Morgan Stanley have warned that an even steeper drop is possible. Goldman Sachs on Monday slashed its forecast for economic growth, citing a growing risk of a U.S. recession next year.

The Nasdaq Composite Index, as well as the Russell 2000 index of smaller companies that are more vulnerable to the economic outlook, are already in a bear market.

This sounds ominous. What should I do with my money?

A market decline can offer opportunities for investors with long horizons. Investing in diversified, low-cost index funds has been a successful strategy over the years, through bull markets and bears.

But given the deepening concern that Mr. Trump’s trade agenda could set off a severe economic downturn, volatility and uncertainty are high. People with shorter investment timelines, as well as those nearing retirement, often shift more assets into bonds, which have historically shown greater resilience during downturns.

When was the last bear market, and how long does one last?

The U.S. stock market has always recovered from declines, usually within a couple of years. In early 2020, the outbreak of the coronavirus set off global shutdowns, causing a short, sharp bear market. The Federal Reserve intervened, and markets regained their losses in six months. In late 2021, fears of surging inflation leading to sharply higher interest rates pulled the S&P into a bear market in early 2022, which lasted for much of the year.

The S&P has entered a bear market 15 times since 1929. Bear markets have lasted 18.9 months on average, according to Howard Silverblatt, senior index analyst for S&P Dow Jones Indices.

How do bear markets affect the economy?

Bear markets are sometimes precursors to recessions, but not always.

Recessions, defined by the National Bureau of Economic Research as “a significant decline in economic activity that is spread across the economy and lasts more than a few months,” are much more perilous for the economy. Recessions often lead to job losses as economies contract, such as in the summer of 2020, when unemployment levels rose to their worst levels since the Great Depression.

Where did these names — bulls and bears — originate?

The exact origins of the phrase are unclear. But they came into mainstream vernacular in London in the 18th century. One theory traces “bear” to the proverb “selling the bear skin before you’ve caught the bear,” according to Merriam Webster.

The poet Alexander Pope and other writers helped popularize the use of the words bull or bear to describe the stock market when writing about the frenzied rally of the South Sea Company stock and its infamous plummet in a financial scandal referred to as the South Sea bubble.

What will happen next?

Mr. Trump on Monday repeated his calls for the Federal Reserve to cut interest rates. But the Fed does not seem in a hurry to intervene.

Jerome H. Powell, the Fed chair, said last week that the central bank needed to assess the economic effects of the tariffs before taking action, and he has warned that cutting rates could fan inflation.

A new wave of Trump tariffs that took effect on Wednesday were creating even more turmoil in the markets. When asked by reporters on Sunday about the market declines and fears of a recession, Mr. Trump said, “Sometimes you have to take medicine to fix something.”

The warning by Mr. Dimon, one of Wall Street’s most influential leaders, echoes the growing anxiety among corporate chiefs about how the tariffs will play out. Even those who had initially professed support for Mr. Trump’s trade plans are becoming increasingly worried about the consequences.

Even before Mr. Trump’s tariff announcement last week, the U.S. economy had been showing signs of strain after years of healthy performance, Mr. Dimon wrote. Inflation was already a worry, he said, pointing to a yawning fiscal deficit and the need for more infrastructure spending. And stock valuations remain well above historical averages, even after the recent market sell-off.

The potential consequences of the trade fight could make things worse, the letter said. Those include other countries’ efforts to fight back — as China has done by imposing 34 percent counterlevies — and a possible erosion of confidence among consumers and investors. Mr. Dimon also warned about the weakening of the American dollar’s role as the global reserve currency.

“If America, for whatever reason, becomes a less attractive investment destination, the U.S. dollar and the economy could suffer if foreigners sold their U.S. assets,” he wrote.

JPMorgan’s own economists have increasingly been saying a recession is more likely this year, though Mr. Dimon did not personally take a position on those odds in his shareholder letter.

While he asserted that JPMorgan itself was strong enough to withstand the shocks that the levies posed — its traders have profited from previous whipsaws in the markets — the global economy may not be so fortunate. “It is not particularly good for the capital markets,” Mr. Dimon wrote of the tariff-linked volatility.

For now, Mr. Dimon wrote, he is hoping for a speedy resolution to the trade battles. “The quicker this issue is resolved, the better, because some of the negative effects increase cumulatively over time and would be hard to reverse,” he wrote.

The longer-term worry, Mr. Dimon said, is that Mr. Trump’s fight could shred decades-old alliances that cemented the United States’ primacy in the global order. The JPMorgan chief wrote that he was worried that America’s trading partners might seek out deals with the likes of China, Iran or Russia in response to the tariffs.

“America First is fine,” Mr. Dimon wrote, referring to Mr. Trump’s description of his policies, “as long as it doesn’t end up being America alone.”