Traders leaving the New York Stock Exchange after the bell closed on Monday were sanguine about what had been, by an measure, a day of mood swings on Wall Street, as waves of volatility shook the stock markets, each one created by another deluge of headlines around Donald Trump’s trade war and global economic uncertainty.
“The markets opened down a lot, then there was a rumor that the tariffs were off, and they went back up, then all bets were off again and it went down,” said Steve Kos of Option Circle, who offered a series of trading day comparisons as he walked out on to Broad Street in lower Manhattan.
“You’d have to go back to 2020 with Covid, when people thought the world was going to end. Prior to that it was 2008.”
Others leaving the exchange agreed that the reaction to a false report of a 90-day pause on US tariffs, except for China, which the White House press secretary, Karoline Leavitt, shot down as “fake news”, showed just how edgy the markets are.
“The markets want to go higher, but they’re waiting for a reason to go higher,” said a trader who offered his name as Jay, who, like many traders, said he did not want to give his full name as he was not authorized to speak to the media.
Monday’s wild gyrations came after a misreading of an interview with Kevin Hassett, director of the national economic council, on Fox News on Sunday. In the interview, Hassett was asked whether Trump could call a “90-day timeout” on his tariffs, to which Hassett responded: “I think the president will decide what the president is going to decide.”
But Jay said “everything” they saw was about Trump’s relationship with China. The administration, he said, “was trying to get everyone onboard so they can box China out. I think they’re saying, look, we will drop the tariffs on you, but you have to tariff China.
“Everything is about China. Everything. It’s not about lumber or fentanyl, it’s about China. Greenland is 100% about China – and Russia, to a degree. Panama is about China. This is all about slowing China down.”
But, he said, no one was anticipating that the US was looking to become an insulated, self-sustaining nation. “Nobody wants that. They just want it more fair,” he said.
“Now we’re $37tn in debt and it needs to be rejigged, but he [Trump] is trying to do it in a shock-and-awe fashion. It could be months or years before we know whether he’s successful or not … but obviously it’s going to take some pain.
“The question is, how much pain can our economy and stock market take for the good things to happen? If it’s one or two weeks of sell-offs, we can stomach that, but if it’s months, the congressmen facing election next year are going to squeal …”
The market swings, said Stephen, another trader, showed that “no one knows what’s going on. We don’t know. The swing came out of nowhere, so what was that? Then the market falls out of bed. And then you read fake news. I mean, who put that up? A mistake? Ah, I don’t know.”
Asked if we are all in Donald Trump’s hands, the trader said: “You’ve got to hope he has a gameplan he’s not disclosing. That’s where I lay my hope. In actuality, it’s very scary. It’s a scary time right now.”
Another, leaving the exchange, said the picture of a trading floor with brokers yelling and screaming to sell was highly archaic. There had been anxiety on the trading floor, yes, but since most trading is done automatically, by computer: “It’s more like organized chaos.”
The day’s trading had in fact been relatively quiet, with the Dow Jones ending down 349 points, or less than 1%, on the day, and the S&P down 12, or 0.23%.
“I think there was a lot more anxiety overnight in the pre-market trading, and then it settled down and evened out,” said a trader who offered his name as Gordon. Looking toward the next few days, many expect continuing volatility.
But with volatility also comes the opportunity to make money. Trump may have set off the market turmoil last week with his Rose Garden “liberation day” reciprocal tariff presentation – including Heard Island and McDonald Islands in the southern Indian Ocean, populated only by penguins – but there are trading patterns to be found, and where there are patterns, there is opportunity.
A technical analyst, Anthony, a veteran of Wall Street since 1997, said the volatility in trading was being determined by Trump’s comments, that were in turn triggering automated trading algorithms to move the markets “like a rubber band”. He analyst said retail investors had not even begun selling off yet, “but it’s coming”.
“What’s happening is that it’s going to hit the American people, and they’re going to keep their wallet closed in their pocket. Without a doubt, we’re hitting a recession,” he said. But would the traders still make money? “You bet. You can make more in a down market than up market.”
But ultimately, he said, Donald Trump is not for ever. “We might be under the mercy of him right now, but just like the World Trade Center, the 70s oil embargo, [Alan] Greenspan with Long-Term Capital Management – all these things happen. It’s a blip. He’s going to come and he’s going to go.
“He’s going to try to push everything he can through now, before the midterms. It’s going to blow up in his face, cause a recession, and any president that causes a recession never gets re-elected – and nor does his party.”
