Dow sinks more than 850 points as tariff uncertainty and AI disruption fears roil markets
By John Towfighi, CNN
New York (CNN) — Stocks fell, gold moved higher and volatility picked up Monday as uncertainty about President Donald Trump’s new proposed tariffs and nerves about artificial intelligence weighed on Wall Street.
The Dow was down 866 points, or 1.75%, in afternoon trading. The broader S&P 500 fell 1.25%, and the tech-heavy Nasdaq Composite sank 1.42%.
After the Supreme Court on Friday struck down the tariffs Trump had levied using an emergency powers law, the president over the weekend announced he would hike tariffs to a new level of 15% on imports into the United States via different legal authority.
The renewed focus on tariffs, in addition to confusion about potential refunds, is clouding the outlook for stocks. Wall Street’s fear gauge, the VIX, jumped 11% Monday and surpassed 20 points, a threshold that signals elevated volatility in markets.
“The push and pull with tariffs is likely to be a distracting theme for markets for the remainder of the year, albeit with less volatility than the initial shock last April,” Michael Landsberg, CIO at Landsberg Bennett Private Wealth Management, said in a note.
While investors are grappling with new tariff announcements, Wall Street is also wrestling with lingering weakness in technology and AI stocks. The tech-heavy Nasdaq is down roughly 6% since hitting a record high in late October.
Fears of AI disruption continue to weigh on markets. Citrini Research on Sunday published a report on Substack laying out hypothetical scenarios for how developments in AI could disrupt certain parts of the economy. Stocks that were mentioned in the report tumbled on Monday.
American Express shares (AXP) sank 8% and were set for their worst day since April. Shares of DoorDash (DASH) and private equity firm KKR (KKR), two other companies named in the post, sank 6.8% and 9%, respectively.
More than 70% of stocks in the S&P 500 were lower Monday. Stocks had eked out a gain on Friday, but sentiment weakened over the weekend as Trump said he would hike his new proposed tariff from 10% to 15%.
Gold, considered a haven amid uncertainty, rose 2.9% and climbed above $5,200 a troy ounce. “Fear” was the sentiment driving markets, according to CNN’s Fear and Greed Index.
The US dollar slightly weakened against other major currencies. Treasury yields fell as investors scooped up bonds.
“The key issue for markets is not just the tariff level itself, but the unpredictability surrounding what comes next,” Daniela Hathorn, senior market analyst at Capital.com, said in a note.
The-CNN-Wire
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