S&P 500 snaps back, reclaims 5600 after wild 120-point swing

The S&P 500 flipped the script on Monday, pulling off a last-minute bounce to close slightly higher after tanking more than 120 points earlier in the day. It ended the session up by 0.1%, barely above 5600, clawing its way back from a 1.7% drop.

That recovery came as Wall Street stared straight into the chaos of President Donald Trump’s tariff threat set to hit later this week. According to data from CNBC, Monday’s sharp reversal followed a brutal morning when the S&P 500 was trading 10% below its record high.

The Dow Jones Industrial Average climbed 289 points, or 0.7%, while the Nasdaq Composite stayed red, dropping 0.7%. These price actions came during a rocky final session for what’s been a losing month and quarter for all three major indexes.

Tech tanks while Trump’s tariff threat rattles markets

Big tech was what dragged down early trading, as stocks of tech giants continue to perform terribly. Nvidia dropped by 3%, Meta Platforms lost 1%, and Tesla slid by 3% too. AI mania that pumped up tech in 2024 didn’t show up to help. 

Nvidia, once the golden child of the AI rally, is now trading more than 30% below its 52-week high. While tech got hammered, the data shows that investors moved some money into names like Coca-Cola and Walmart, pushing those stocks higher.

And of course, while all that is happening, the president was telling reporters that his “reciprocal tariffs” would hit all countries, not just a few. Speaking on Monday aboard Air Force One, Trump rejected the idea that the policy would be narrow or limited, and said he plans to announce the full details on Wednesday.

Meanwhile, White House press secretary Karoline Leavitt told reporters, “It’s time for reciprocity, and it’s time for a president to take historic change to do what’s right for the American people, and that’s going to take place on Wednesday.”

Jay Woods, chief global strategist at Freedom Capital Markets, said the market was reacting blindly. “We continue to trade with the backdrop of tariff uncertainty and a shroud of secrecy about what may come next,” Jay said. “As a result, investors sell first and wait. It has all the makings of a panic sell-off, where a snap back rally on the horizon.”

CNBC’s Rapid Update survey showed economists slashing their first-quarter GDP growth estimate to 0.3%. That’s a steep fall from the 2.3% growth seen in the fourth quarter of 2024. Some investors are now openly worried about a potential recession.

Goldman cuts forecast as market closes worst quarter in years

As if all that wasn’t enough, Goldman Sachs just cut its year-end forecast for the S&P 500, warning that returns are drying up. The bank’s Chief U.S. equity strategist, David Kostin, told clients Sunday that Goldman now expects the index to end 2025 at 5700, down from their earlier call of 6200.

That’s a 2.1% gain from Friday’s close but still below where it started the year. “These estimates incorporate downward revisions to both earnings growth and valuations, reflecting a weaker base case economic growth backdrop, higher uncertainty, and higher recession risk,” David wrote in a note.

Goldman Sachs had already backed off its original 6500 target less than a month ago. Goldman’s economic team also increased the odds of a recession.

All of this comes as the market wraps up one of the roughest months since 2022. The S&P 500 is down 6.3% for March, heading for its worst monthly drop since it fell 9.3% in September 2022. The Nasdaq has fallen 8% this month. The Dow is down 5%.

The full quarter has been no better. The S&P 500 has lost 5% over the last three months, which ends a five-quarter winning streak. The Nasdaq has dropped 10.9% in the first quarter, the steepest decline since it plunged 22.4% in Q2 of 2022. The Dow shed 1.6% over the same period, making it the smallest loser of the three but still very much in the red.

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