White House Advisor's 'Considering Tariff Delay' Remarks Send New York Stock Market on a Roller Coaster

Plunge and Surge, Then Fall Again

Fear Index (VIX) Surpasses 60 at One Point in the Morning

Due to the shockwave of Trump's tariff impact, the U.S. stock market, which started with a plunge on the 7th (local time), rebounded to positive around 10 a.m. Eastern Standard Time but then turned back to a decline, showing a roller coaster market. This was due to White House Economic Advisor Kevin Hassett mentioning in an interview that President Trump is considering a 90-day tariff delay for all countries except China.

The S&P 500, which plunged more than 5% right after the opening, reversed to a 2.2% rise at 10:15 a.m. Eastern Standard Time. The Dow Jones Industrial Average, which had plunged 1,700 points right after the opening, also turned to a 0.4% rise, and the tech-heavy Nasdaq Composite Index rebounded more than 3%. However, it turned back to a decline afterward.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's fear index, surpassed 60 at one point in the morning but dropped sharply. As the possibility of a recession increased, the interest rate swap market began to anticipate four 0.25% rate cuts by the end of the year.

Tesla's stock price, which started with a more than 5% drop, rebounded more than 4% to $249, rising more than $20 in just a few minutes. Most tech stocks, including Apple and Nvidia, which started with a decline, are fluctuating between rises and falls.

The price of Bitcoin fell 3.9% over 24 hours to $76,482 but rose to the $79,000 range, down 0.2%.

According to data from Goldman Sachs Group's prime brokerage desk cited by Bloomberg, hedge funds recorded the largest net selling in global stocks after Trump's mutual tariff announcement last week. They pointed out that individual investors are the last investor group that has not yet sold U.S. stocks, which is an additional risk factor for the stock market.

JP Morgan strategist Dubravko Lakos-Bujas lowered the year-end forecast for the S&P 500 from 6,500 to 5,200. Oppenheimer's John Stoltzfus lowered it from 7,100 to 5,950. Prior to this, Evercore and Goldman Sachs had lowered their year-end target index for the S&P 500 over the past few days.

On Wall Street, concerns grew that hedge funds would continue to sell additional stocks to raise cash needed for margin calls. FWD Bond's chief economist Chris Rupkey said, "Margin calls are going out now."

Trump's basic 10% tariff on the world took effect on the 5th. Mutual tariffs are scheduled to take effect on the 9th. Trump made it clear on the evening of the 6th local time that he had no intention of revising the tariff issue despite the market plunge, saying, "Sometimes you have to take medicine to fix something."

HSBC strategist Max Kettner warned that there would be a "very short-term rebound" in the stock market, but the rebound would be another trigger for a decline. Morgan Stanley's Michael Wilson said the S&P 500, which is not calming down from tariff anxiety, should be prepared to fall further.

Wall Street magnates also began to voice criticism of Trump's tariffs.

Jamie Dimon, CEO of JP Morgan, who has shown cautious views on Trump's policies, argued that "the negative impact of tariffs accumulates over time and is difficult to reverse," and should be corrected quickly.

Bill Ackman, founder of hedge fund Pershing Square, criticized that "the U.S. is heading towards an economic nuclear winter caused by losing the trust of global companies." Ken Griffin of the world's largest hedge fund Citadel, Stanley Druckenmiller, and others also criticized Trump's tariffs.

Guest reporter Kim Jung-ah kja@hankyung.com