Equities See Wave of Volatility Ahead of Tariff Rollout | Closing Bell

Comprehensive cross-platform coverage of the U.S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Vonnie Quinn, Carol Massar and Tim Stenovec.

A renewed wave of volatility gripped global markets just days ahead of President Donald Trump’s tariff rollout, with stocks erasing losses in the final stretch of a jittery quarter. As equities bounced, bonds moved away from session highs. Gold climbed to a record.

From New York to London and Tokyo, stocks were hit by intense swings. While the S&P 500 wiped out a 1.7% drop, US shares saw their worst quarter compared to the rest of the world since 2009. Defensive groups outperformed. Energy producers joined a rally in oil as Trump suggested the US may work to curtail crude shipments from Russia. A gauge of the “Magnificent Seven” megacaps extended a quarterly rout to 16% amid lingering concerns of an artificial-intelligence bubble. The damage is piling up among the stocks that had, until recently, been the market’s biggest drivers. Chipmaker Nvidia Corp. has seen its shares tumble 28% from a January peak. Broadcom Inc. is down 33% from a record in December. Microsoft Corp., Amazon.com Inc. and Alphabet Inc. and Meta Platforms Inc. have all fallen 20% or more from their own records.

It was the first time since the onset of the pandemic in March 2020 that bonds rose and stocks fell in a three-month period. The dollar, long a go-to hiding place during market selloffs, has not been acting as such lately. While the greenback saw a mild gain Monday, it suffered the worst start to a year since 2017.

The Trump administration’s mixed messaging on what new tariffs will be unveiled Wednesday and how they’ll be announced have traders flustered as they try to position around the biggest risk confronting the market in years.

Trump’s top spokesperson said the announcement would feature “country-based” tariffs, but added that the president is also “committed” to implementing sectoral duties at another time.

“Tariffs will likely continue to drive the market discussion,” said Chris Larkin at E*Trade from Morgan Stanley. “Whether tariffs are more or less rigid than expected could go a long way toward shaping the market’s near-term momentum.”

The S&P 500 rose 0.6%. The Nasdaq 100 was little changed. The Dow Jones Industrial Average rose 1%. Tesla Inc. led losses in megacaps, while Apple Inc. gained. Newsmax Inc. skyrocketed in its debut session. Vaccine stocks sank as a top regulator left the US Food and Drug Administration.

The yield on 10-year Treasuries declined three basis points to 4.22%. The Bloomberg Dollar Spot Index rose 0.2%. Gold topped $3,100 for the first time.

Trump’s trade war revived fears that the economy could stall. Most economists still aren’t anticipating the US will fall into an actual recession in the next year, but they do say the chance of an economic contraction has increased. Another worry, in the view of economists and market watchers, is the risk that a slowdown in growth will occur alongside accelerating inflation, a dreaded scenario known as stagflation.

Amid all the concern about the economic impacts of tariffs, Goldman Sachs Group Inc.’s David Kostin cut his S&P 500 target, and now expects the benchmark to end the year around 5,700 versus his previous estimate of 6,200.

“If the growth outlook and investor confidence deteriorate even further, valuations could decline much more than we forecast,” Kostin wrote in a note. “We continue to recommend investors watch for an improvement in the growth outlook, more asymmetry in market pricing, or depressed positioning before trying to trade a market bottom.”

A big down March is actually quite rare, with the S&P 500 declining more than 3% just seven other times since World War II, according to Jonathan Krinsky at BTIG. Whenever that happened, April closed green for an average gain of 5.92%.

“While we continue to have concerns about the medium-term trend of the market and it’s clearly not going to be an easy month, the set-up for April seems to favor the bulls,” he said.

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