Dow Plunges Over 800 Points as Tariff Jitters and AI Disruption Concerns Rattle Markets

Wall Street Slides as Trump Tariff Uncertainty and AI Fears Jolt Markets; Gold and Volatility Surge

U.S. stocks fell sharply on Monday as renewed uncertainty over President Donald Trump’s proposed tariffs and lingering concerns about artificial intelligence weighed heavily on investor sentiment, driving a flight to safe havens and a spike in market volatility.

The Dow Jones Industrial Average tumbled 823 points, or 1.66%, marking its worst session in a month. The S&P 500 declined 1.04%, while the tech-heavy Nasdaq Composite fell 1.13%, reflecting sustained pressure on growth and technology shares.

Market unease intensified after the U.S. Supreme Court ruled on Friday that Trump had overstepped his authority in imposing tariffs under emergency powers. Over the weekend, however, the president announced a fresh plan to levy a 15% tariff on U.S. imports using a different legal framework. The sudden policy shift, combined with uncertainty over whether importers will receive refunds for duties already paid, clouded the outlook for equities.

Volatility rose sharply as a result. Wall Street’s fear gauge, the Cboe Volatility Index (VIX), jumped 12% on Monday and climbed above the 20-point level, a threshold typically associated with heightened market stress.

Beyond trade concerns, technology and AI-related stocks remained under pressure. The Nasdaq is now down roughly 5.8% from its record high reached in late October, underscoring growing skepticism about valuations and the pace of returns from AI investments.

Fears of AI-driven disruption also resurfaced after Citrini Research published a report outlining hypothetical scenarios in which advances in artificial intelligence could upend parts of the economy. Several stocks mentioned in the report suffered steep losses. American Express fell 7.2%, its worst day since April, while DoorDash slid 6.6% and private equity firm KKR dropped 8.89%.

Separately, IBM shares plunged 13.15%, marking their worst session since 2000, after AI startup Anthropic said its Claude model could help significantly reduce the cost of modernizing COBOL-based systems, raising concerns about the future relevance of legacy enterprise software providers.

Market breadth was broadly negative, with more than 60% of S&P 500 components closing lower. Stocks had managed a modest gain on Friday, but sentiment deteriorated over the weekend as Trump raised his proposed tariff rate from 10% to 15%.

Safe-haven assets benefited from the risk-off mood. Gold surged 3.4%, climbing above $5,200 per troy ounce, as investors sought protection from policy and geopolitical uncertainty. CNN’s Fear and Greed Index pointed squarely to “fear” as the dominant market emotion.

Additional concerns around private credit markets and escalating U.S.-Iran tensions added to the cautious tone, according to Matt Maley, chief market strategist at Miller Tabak + Co.

Cryptocurrencies also came under pressure. Bitcoin fell more than 4% over the past 24 hours, hovering near $64,600. The digital asset has struggled throughout the year and is now down nearly 50% from its record high above $126,000 in early October.

In currency and bond markets, the U.S. dollar weakened slightly against major peers, while Treasury yields fell as investors rotated into government bonds for safety.