April 7 (Reuters) - A global equities meltdown lost some of its intensity on Monday as U.S. President Donald Trump stuck to his sweeping tariff plans though his advisers said he would be willing to negotiate with countries scrambling to head off tariffs.

At the close of trade in New York, the S&P 500 was down 0.23% on the day, following a session characterized by wild swings on tariff headlines. Its recovery from its lows helped the market avoid confirmation of a bear market, which would have occurred if it had closed 20% down from February's record high.

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Trillions of dollars have been vaporized from equity values around the world after the Trump administration announced sharp increases in tariffs on almost all trading partners.

Japan's blue-chip Nikkei slid almost 8% (.N225) , opens new tab and European shares fell more than 4% (.STOXX) , opens new tab. But U.S. Treasury yields rebounded from an earlier fall and the VIX stocks volatility gauge tempered its rise after jumping to its highest since August (.VIX) , opens new tab.

QUOTES:

BENJAMIN FORD, G10 FX STRATEGIST, MACRO HIVE, LONDON

"Where I think we are now is that Trump's waiting for the other sides to come up with a plan, it speaks to what (Scott) Bessent said on Liberation Day, a deal could be done down the road, but we're going to wait. (One) route is that we see Trump focus on those (countries) that are retaliating first, so then before we get anything good, we get something worse. That still leaves us in this scenario where you need to be short dollars and probably need to be fading weakness in the euro."

"Last (term), there was a strong care from (Trump) about the equity markets. But this time it seems he cares a lot about rates and the dollar. He's almost turned into a macro trader rather than an equity trader. In his mind, he's having great success at the moment. He wanted yields lower, he wanted the dollar lower and he wanted oil prices lower. He's getting all three of those at the moment. The chance of him changing tactic at the moment with approval ratings still relatively steady is probably quite slim."

"We may see some positivity for the dollar as some of the stagflation trade gets priced out, as U.S. yields remain supported ... equities may see some stabilization in the near term."

"We're not hearing any sort of issues in terms of the liquidity front. I don't think that's an issue right now ... for (central banks) to step in, you would have to have some sort of mini crisis, something like in the UK when we had the budget crisis where there was a particular implication for a portion of the financial sector."

DOUG RAMSEY, CHIEF INVESTMENT OFFICER, LEUTHOLD GROUP, MINNEAPOLIS

“The way in which the tariff plan was unveiled could not have been more ill-timed, given the vulnerabilities of the economy. The fact was that it had slowed down significantly even before the tariffs.”

COLIN GRAHAM, HEAD OF MULTI-ASSET STRATEGIES, ROBECO, LONDON

"If it's a 50% probability of recession, you've got to look at another 20%-25% down in equities from here. So there is still quite a way to go."

"There isn't a put in place from Trump or the Fed. The put is on the bond market, as Trump's been saying he's aiming for lower bond yields. So if we're looking for some sort of support from the White House, it's the bond market we have to watch, not equities."

IRENE TUNKEL, CHIEF STRATEGIST, BCA, NEW YORK

“The first stage of equity selloff, driven by policy uncertainty, is now mostly complete… With the tariffs announced, the markets have reached the peak “bad news,” and the first stage of the selloff is now complete. Now, the second, even more damaging stage has begun."

“The second stage of the selloff is a reaction to the imminent effect of tariffs on economic and earnings growth. The selloff that started the morning after the 'Liberation Day' is brutal, and as of Monday morning, the S&P 500 and the NASDAQ are down another 13.7% and 14.4%, respectively, with $5.1 T in market value wiped.

“This stage of the selloff is pricing in the economic damage that new tariffs will ensue. Q1 earnings season begins in about a week, and companies will report on the potential effect of tariffs on their profit margins and their plans to reshape supply chains. Aggressive and ubiquitous earnings growth downgrades will accompany negative corporate guidance. Over time, as the damage the tariffs will inflict on the economy becomes a reality – a spell of economic downgrades will follow.

“A pullback in the cyclical sectors and industries, such as Banks, and Transportation, signals that the markets are starting to price in the pain of an increasingly likely recession.”

BHANU BAWEJA, CHIEF STRATEGIST WITH UBS IN LONDON (during a call with journalists)

“The market sleep-walked into this because they felt that Trump would care about the stock market, because they felt this was only a bargaining tool. The market is now having to rethink those priors.”

“There could be a material, serious hit to EPS growth.”

“It doesn’t stretch the imagination at all to say we could get zero earnings growth, or negative earnings growth.”

“We don’t think we are at a stage where the worst is priced by the market.”

“Even the positioning of the market … most investors have been buying the dip … People until very recently have been buying into this dip.”

“We are nowhere close to the absolute worst case. So far we haven’t seen anything in liquidity markets break, we haven’t seen anything in credit markets break.”

“This is a man-made problem. Concentrated really around one man, as opposed to any institution discussion with the USTR. If that one person changes their mind, suddenly the whole algebra changes,” he said, adding that it was “hard to see what the circuit-breaker is” for Trump to change course.

“Many countries, China included, are going to escalate instead of de-escalate. Things could get worse before they get better.”

MICHAEL JAMES, MANAGING DIRECTOR OF EQUITY TRADING, ROSENBLATT SECURITIES, LOS ANGELES

"Things did not get any better over the weekend in terms of commentary from the White House and that's why we saw futures extending losses from Friday into the morning. There was a headline, an unconfirmed story, there would be a 90-day moratorium on recently initiated tariffs. That didn't come to fruition and was denied and markets immediately reversed back into red on the day."

"On a constructive note, we're still off of the early morning lows and we're clearly significantly over-sold on just about every technical metric in the short term. But without any improvement in the tariff situation, which is the dominant focus of everyone's attention, it's going to be hard to expect that there will be much meaningful upside, outside of a potential over-sold bounce."

"There really is not a significant and notable price level in the S&P 500 or the Nasdaq that you could ascribe to be a potential bounce. Look at how over-sold we are from a short term. The VIX was north of 60 in the pre-open this morning. That's obviously moderated some. Still 50 is still pretty elevated, although off of the early levels."

"The only thing that's going to help both sentiment and the markets direction is going to be some easing of the entrenched tariff views that were espoused last Wednesday night. We're going to need some form of moderation on those tariff levels to have any potential for meaningful improvement."

Trump's threat of another 50% tariff on China "merely highlights how entrenched the White House is regarding the tariff situation currently. As we've seen in the past, that's subject to change any day. Maybe it does. Maybe it doesn't."

RYAN DETRICK, CHIEF MARKET STRATEGIST, CARSON GROUP, OMAHA

“The word of the day, the word of the week, the word of the month, the word of the year is clearly ‘uncertainty.’ And the reality is even though we now know more about what's going on with the tariffs, the potential fallout from these policies have continued to lead to a sell first, ask questions later mentality.”

“If there's any good news, we are extremely oversold and any potential slimmer or glimmer of positive news could lead to a substantial bounce. But the reality is investors are scarred, investors are worried and this volatility is likely with us for a good deal longer.”

“We just lost 10% in two days - Thursday and Friday last week. That is extremely rare. Historically, when you see moves like that, it's closer to a low, you're in washout territory.”

“At the same time, let's not forget, bonds have done fairly well, gold has done fairly well, even international markets, although they're down the last few days have hung in there and are most are positive on the year.”

“So as bad as this feels, a diversified portfolio, all things considered, is hanging in there. You know, relative to, say, large-cap technology and specifically ‘Magnificent Seven’ names, which have just been in essence, decimated.”

“Powell had a chance on Friday to strike a more dovish tone but the reality is the Fed continues to hang tough.”

“Who blinks first? The Fed or President Trump? The Fed has made it clear that with inflation where it is and unemployment where it is, the (they’re) comfortable without doing anything right now.”

“We think Washington likely has to blink first to present some type of positive news, and honestly the U.S. and China are working hard behind the scenes to find some type of a resolution, some type of common ground to help both countries because China's economy is not in great shape.”

“Ours is, but there's worry about where we're going. (That) would go a long way, some type of positive development with U.S. and China. We think that that's likely something we could see hopefully over the next week or two.”

MAXWELL GRINACOFF, HEAD OF U.S. EQUITY DERIVATIVES, UBS

"The VIX is pricing a recession. This is not going to fade anytime soon."

"Wednesday was supposed to take uncertainty out of the market and it added more uncertainty for the dollar, for rates, for credit, for oil. This isn't just one asset class driving the volatility."

"But even as things are blowing out, it's actually for now relatively contained."

"On August 5 you had five times the normal reactivity in VIX relative to the spot move. Today you're much more in line with history. What that tells me is that this is very orderly, its a fundamental move, its warranted."

"This volatility reaction is extremely healthy for what we have just witnessed."

LUCA PAOLINI, CHIEF STRATEGIST, PICTET ASSET MANAGEMENT

"This situation can get a little bit worse before it gets better."

"You don't want to sell massively because the risk is you get a massive bounce. So you don't do anything."

"There's still selling pressure but a lot of that is algo. A lot of investors are so confused and in a situation that is so difficult to predict, the best thing to do is to wait. The market has fallen so much so quickly you may be on exactly the wrong side of the trade."

"We have a target of 4,500 (for the S&P) in the case of a U.S. recession, which is becoming relatively more likely. "

“The risk now is that Europe puts tariffs on and that by the end of this week the average tariff rate everyone is putting on everyone else is higher than now.”

"There is a risk also of financial stability. And what makes this actually pretty dangerous is that is that if there is a situation where you have a global meltdown, who is going to be bailing out the system?"

“It could be the case that the Fed brings us 50 basis point emergency cut but I don’t think they will do it. The point is this is a typical case where you need a policy response but that is going to be more difficult this time around.”

“We see this as a stagflationary shock with higher inflation and lower growth, but the market only sees the recession.”

ALTAF KASSAM, EUROPE HEAD OF INVESTMENT STRATEGY AND RESEARCH, STATE STREET GLOBAL ADVISORS

"High Yield spreads have continued to widen."

"This is all rational, as weaker credits should suffer disproportionately in this scenario as they rely more on external financing which tends to become scarcer in such moments of uncertainty."

"I think central banks, especially the Fed, will maintain their data dependent mantra, which means the put remains there but in the case of the Fed (it) requires unemployment to spike while inflation remains under control to be activated."

https://www.reuters.com/markets/us/view-us-stock-futures-tumble-indicating-another-plummet-wall-street-2025-04-06/