U.S. Stocks Volatile Amid False Tariff Suspension Rumors

On Monday, U.S. stocks experienced significant volatility as traders eagerly latched onto false news of a 90-day tariff suspension, desperate for any indication that rational voices might influence President Trump's decisions. However, this hope was not realized. The White House has already been criticized for its handling of financial market losses, making a strategic shift at this point seem futile, according to Mike O’Rourke, chief market strategist at Jones Trading.

O’Rourke noted that market participants are beginning to recognize the administration's commitment to implementing tariff measures. With the earnings season approaching, he cautioned that companies are likely to issue negative statements, leaving little room for optimism unless a trade agreement is announced.

Given the uncertainty emanating from Washington, some Wall Street figures have called for a clear message to be sent to the president and his team: avoid buying the dip. While U.S. stocks are cheaper than they were a week ago, investors pausing their selling to buy discounted assets could inadvertently benefit Trump in his global economic "chicken game."

Ed Yardeni, president of Yardeni Research, emphasized the need for a significant stock market decline to pressure the government. He clarified that while he does not wish for a market crash, rising stock prices could reduce the pressure on the White House to make concessions in the trade conflict.