Worries about a potential recession and escalating trade tensions have triggered widespread market sell-offs, wiped at least $4 trillion from the U.S. stock market. Wall Street’s rout began, and all three major indices opened in the red as sharp losses last week continued.
The Dow Jones Industrial Average dropped by 890 points, marking its worst day of the year, while the S&P 500 fell by 2.7%. The decline in the increasingly large Nasdaq composites was even higher, down 4%. The market downturn has eliminated all gains from the three major indexes since the November U.S. presidential election.
Now, the S&P 500 is down 8% from its all-time high on February 19, while the Nasdaq Comprehensive has officially entered the corrections sector after it fell more than 10% from its December peak.
The sell-off has intensified after Trump’s interview with Fox News on Sunday, refusing to rule out the possibility of a recession. Trump is Sunday morning futures with Maria Bartiromo.
Tech stocks have declined, with major losses in major companies (GOOG), Amazon (AMZN), Apple (AAPL), Yuan (Meta), Microsoft (MSFT), NVIDIA (NVDA) and Tesla (TSLA). “President Trump’s comments don’t necessarily set investors who are already on the edge stand out,” said Anthony Saglimbene, chief market strategist at Ameriprise.
Despite market concerns, the White House defended Trump’s economic policy. “Since President Trump’s election, industry leaders have responded to his first U.S. economic agenda, with investment commitments to create thousands of new jobs,” White House spokesman Kush Desai said. He added that Trump achieved “historic jobs, wages and investment growth” in his first term and will do so again in his second term.
Tesla has made profits after Trump’s election victory, down nearly 45% this year. The stock faces additional pressure as protests against Tesla CEO Elon Musk’s ties to the Trump administration and sales in Europe declined. NVIDIA shares fell 5%, while artificial intelligence company Palantir (PLTR) fell 10%.
Bitcoin also took a hit, falling to around $78,000, the lowest level since November, a widespread sell-off of riskier assets.
Uncertainty surrounding Trump’s trade policy has exacerbated investor concerns. He threatened new tariffs for imports from Canada and Mexico, raising tariffs on all Chinese imports from 10% to 20%, and set a 25% tariff on imports of steel and aluminum starting March 12. Last week, Trump also threatened 250% tariffs on Canadian dairy, “Canadian dairy has taken great attention to Canadian dairy and in the era of Canadian customers, this could join Canadian customers.
To cope with the turmoil, the U.S. Treasury’s 10-year yield fell to 4.225% as investors were anxious to government bonds, indicating concerns about economic stability. The focus of the week now shifts to expected inflation data on Wednesday and Thursday, which gives a more insight into the economy.
