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Trump digs in on tariffs

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Trump threatens additional 50% tariff on China

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Futures price in extra Fed easing this year

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Oil falls as trade conflict fuels recession fears

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Investors pile into safe-haven currencies amid tariff

worries

(Updates with closing US market levels)

By Caroline Valetkevitch

NEW YORK, April 7 (Reuters) -

Most major stock indexes ended a turbulent Monday lower as

U.S. President Donald Trump showed no sign of easing up on his

global trade war, while U.S. Treasury yields rebounded.

The European Union proposed counter-tariffs on Monday,

while

Trump

threatened to add another 50% duty on U.S. imports from

China on Wednesday if it did not withdraw its 34% retaliatory

tariffs from last week.

U.S. stocks swung between heavy losses and gains

throughout the session as investors digested changing headlines

related to tariffs.

Stocks have fallen sharply since Trump unveiled sweeping

tariffs late on Wednesday that investors worried could drive up

inflation and push the global economy into recession.

The Cboe Volatility index rose to 46.98, its

highest close since April 2020.

"You can tell shorts are on a hair trigger today, watching

around every corner for a possible (Federal Reserve)

intervention, tariff pause, or trade deal," said Jamie Cox,

managing partner at Harris Financial Group in Richmond,

Virginia.

"It goes to show you just how short-lived this market

rout is likely to be."

Traders bet the increasing risk of recession could prompt

the Fed to cut interest rates as early as May. Futures markets

are pricing in almost five quarter-point cuts in U.S. rates this

year.

Rising costs will also put pressure on company profit

margins, as the U.S. earnings reporting season begins later this

week.

The White House denied a report that Trump is considering a

90-day pause in tariffs for all countries except China. The

report, which the White House called "fake news," briefly turned

U.S. stocks positive early in the session.

The Dow Jones Industrial Average fell 349.26

points, or 0.91%, to 37,965.60, the S&P 500 dropped 11.83

points, or 0.23%, to 5,062.25 and the Nasdaq Composite

rose 15.48 points, or 0.10%, to 15,603.26.

During the session, the S&P 500 went from a low of

4,835.04 to a high of 5,246.57.

MSCI's gauge of stocks across the globe

fell 18.81 points, or 2.46%, to 745.48.

European shares also slumped, with the STOXX 600 closing

at its lowest since January 2024. The pan-European STOXX 600

dropped 4.5%, down for the fourth straight session.

Treasury yields rose on optimism that some countries may

negotiate deals with Trump to avoid tariffs.

Trump's advisers said he would be willing to negotiate

with countries that are scrambling to head off tariffs as high

as 50% due to take effect on Wednesday. White House economic

adviser Stephen Miran encouraged countries hoping to escape high

reciprocal U.S. tariff rates to make offers to Trump.

But Trump ruled out discussions with Beijing as he

ratcheted up a confrontation with China.

The European Union is still willing to negotiate with

the U.S. administration, European Commission President Ursula

von der Leyen affirmed on Monday, adding that Brussels was also

ready to take counter measures.

Benchmark 10-year note

yields were last up 15.8 basis points on the

day at 4.149% and are on track for the largest daily increase

since April 10, 2024. They fell to 3.86% on Friday, the lowest

since October 4.

Interest-rate sensitive two-year yields rose

6.2 basis points to 3.732% and are heading for their largest

daily increase since March 24. They earlier reached 3.435%, the

lowest since September 2022.

The dollar weakened against the safe-haven Swiss franc,

while a gloomier growth outlook kept oil prices down.

The dollar hit its lowest in six months against the Swiss

franc. It was last down 0.1% at 0.86.

Oil

prices slid

to a near four-year low. Brent futures fell $1.37,

or 2.1%, to settle at $64.21 per barrel, while U.S. West Texas

Intermediate crude futures fell $1.29, or 2.1%, to settle

at $60.70.

Gold prices fell as well. Spot gold was down 2.4%

to $2,963.19 an ounce.

JPMorgan Chase ( JPM ) CEO Jamie Dimon warned the tariffs

could cause lasting damage, while fund manager Bill Ackman said

they could lead to an "economic nuclear winter."

"Last week's theme is continuing but there were some

meaningful developments over the weekend, in particular with

Wall Street titans and business leaders effectively coming out

very strongly against President Trump's policies and tariffs,"

said Oliver Pursche, senior vice president, advisor for

Wealthspire Advisors in Westport, Connecticut.

"That pressure is going to continue to mount."

(Additional reporting by Alun John in London and Saeed Azhar in

New York; Editing by Kim Coghill, Himani Sarkar, Shri

Navaratnam, Hugh Lawson, Nick Zieminski and Richard Chang)