The opening bell rang on Wall Street at 9:30 a.m., and in a matter of minutes, screens all around Lower Manhattan were flashing red. The Dow Jones Industrial Average had already dropped more than 400 points by 9:42 a.m. Traders gazed at charts that plunged in nearly vertical lines, some pacing behind workstations and others reclining in ergonomic chairs. It was sudden, even by today’s standards. When losses pick up speed, a certain quiet descends upon a trading floor, with phones ringing and laptops still clacking but voices muted.
The Dow was down more than 800 points, or about 1.7%, at 10:15 a.m. Both the Nasdaq Composite and the S&P 500 had declines of more than 1%. The reduction wasn’t caused by a single headline. There was a collision.
| Category | Details |
|---|---|
| Index | Dow Jones Industrial Average |
| Other Major Indexes | S&P 500, Nasdaq Composite |
| Key Company | Nvidia |
| Market Driver | Tariff reversal & AI disruption fears |
| Location | Wall Street, New York City |
| Reference |
Investor sentiment initially improved on Friday after the Supreme Court ruled that several of President Trump’s expansive tariffs were unconstitutional. The week ended with the markets in a tumultuous but ultimately optimistic state. But the story changed by Saturday. Trump declared a new baseline import duty rate of 15% that will take effect right away. In a stern response, the European Union insisted that “a deal is a deal” and rejected any hike.
Clarity appears to be more beneficial to investors than optimism. Additionally, this didn’t feel like either. By mid-morning, as corporate profits attempted to level down, discussions on trading desks shifted to supply chains, international reprisals, and the potential for new trade conflict. Markets are perceived as being worn down by policy reversals.
Technology stocks became the focus of a major change around 11:30 a.m. Anthropic debuted a new artificial intelligence tool over the weekend that can automate analytical processes that are typically performed by consulting teams. It wasn’t your average chatbot. It was marketed as a direct substitute for human services with large profit margins.
By midday, IBM’s stock had fallen 13%. Cognizant and Accenture experienced a steep decline. With force, the “AI scare trade,” as some traders now refer to it, resumed. Industries that depend significantly on white-collar workers, such as software, real estate, and logistics, were suddenly at risk.
It’s possible that the worry was more about what this particular tool represented than it was about the item itself. AI is no longer only theoretical. Office doors are being knocked on.
The Dow was close to its lowest levels around 12:45 p.m. When discussing “sector rotation” and “valuation resets,” CNBC anchors used careful language. However, the atmosphere was more sentimental than technical. It was difficult to ignore how rapidly confidence may break down when conflicting narratives collided while seeing this play out. However, markets don’t always move in a straight line.
Just about 1:30 p.m., buyers started to reenter the market. One of the few green names on the board was Nvidia, the AI chipmaker whose earnings were due later in the week. It seems that investors were making a distinction between AI enablers and disruptors. Chip demand may continue to rise even if consultancy margins were endangered.
The Dow had reduced its losses to almost 500 points by 2:15 p.m. The freefall had stopped, but there wasn’t yet a noticeable recovery. The morning was described as “overdone” by traders. Sensing oversold conditions, bargain hunters cautiously intervened.
During explosive sessions, there is usually a point at which weariness sets in and panic peaks. That time seemed to come in the middle of the afternoon. We’re not in a recession,” a Midtown portfolio manager was heard assuring a customer at 3:05 p.m. We are currently repricing. That difference might be significant. Or it can just be words that are consoling.
The Dow had dropped over 300 points by 3:40 p.m. Although it wasn’t a victory, the rally was steady. The Nasdaq reduced a large portion of its previous decline, helped in part by Nvidia’s tenacity. According to several traders, the recovery was accelerated because hedge funds were covering short bets.
Whether the afternoon comeback represented true belief or merely strategic positioning ahead of Nvidia’s report is still unknown. Sometimes markets rise because it gets too crowded, not because fear goes away.
By 4:00 p.m., when the closing bell sounded, the Dow had made up a significant amount of its losses. Although it did not end well, the story’s focus had changed from collapse to resilience.
Tourists, mostly oblivious to the intraday drama, posed for pictures outside the New York Stock Exchange. Analysts were already writing notes headlined “AI Disruption: Opportunity or Overreaction?” inside offices with a view of the Hudson.
The day will probably be remembered more for the rapidity of the mood swings than for the precise closing figure. Tariff uncertainties early in the day. Anxiety about AI by noon. Selective optimism by the afternoon.
In a lot of ways, it resembled a glimpse of investing in 2026: technological disruption and policy risk merging in real time on luminous screens. And that might be the more general lesson. These days, markets do more than just price profits. They are attempting to determine who will withstand the pricing disruption, minute by minute.
