US stocks dropped sharply on Monday, driven by concerns over President Trump’s economic policies, particularly his tariffs, causing all major indexes to close in the red. The Dow fell 890 points (2.08%), the S&P 500 dropped 2.7%, and the Nasdaq plunged 4%, marking their worst performances of the year. Investor anxiety escalated after Trump indicated potential economic instability, leading to a spike in Wall Street’s fear gauge. The tech sector suffered significantly, with major companies like Tesla and Nvidia experiencing steep declines. Bitcoin also tumbled to its lowest level since November, as investors grappled with rising uncertainty and fears of a recession.
New York
CNN
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U.S. stocks experienced a sharp decline, bitcoin took a hit, and Wall Street’s fear index reached its peak for the year as worries about President Donald Trump’s economic policies triggered a broad market selloff on Monday.
The downturn on Wall Street began early, with all three major indices sharply falling at the start. U.S. stocks continued to drop all day and, despite a slight afternoon uptick, ended lower.
The Dow finished down 890 points, or 2.08%, recovering from a temporary dip of over 1,100 points.
The broader S&P 500 fell by 2.7%, while the tech-focused Nasdaq Composite dropped 4%.
The Dow and S&P 500 recorded their worst performance of the year, while the Nasdaq had its largest single-day drop since September 2022.
This drop extended a tough month for markets, causing all three major indices to erase their gains since the U.S. presidential election in November.
The broad selloff was largely fueled by concerns over the implications of Trump’s tariffs. In a televised interview on Sunday, Trump suggested that the U.S. economy would enter a “transition period” and did not dismiss the possibility of a recession.
When questioned on Fox News’ “Sunday Morning Futures With Maria Bartiromo” about the likelihood of a recession this year, Trump replied, “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”
Technology stocks led the decline, impacting the S&P 500 and pulling the Nasdaq into correction territory. The S&P 500 closed 8.6% below its record high achieved on February 19.
The “Magnificent Seven” tech giants — Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) — all closed in negative territory on Monday.
“Trump’s remarks, which did not entirely dismiss the risk of a recession, unsettled investors already on edge,” noted Anthony Saglimbene, chief market strategist at Ameriprise.
The White House claimed that Trump would trigger “historic” economic growth in his second term.
“Since President Trump took office, industry leaders have responded to his America First economic approach of tariffs, deregulation, and energy expansion with trillions in investment commitments that are expected to create thousands of new jobs,” said White House spokesman Kush Desai. “Trump achieved historic job, wage, and investment growth during his first term, and plans to replicate this success in his second term.”
Tesla’s stock dropped by 15.4% on Monday. After the November electoral victory, Tesla stock soared. However, it is now down nearly 45% this year, erasing its gains from last November.
The company’s shares have significantly suffered in recent weeks due to backlash against CEO Elon Musk for his prominent role in the Trump administration, alongside declining sales in Europe.
Nvidia dropped 5%, while Palantir (PLTR) — also a notable player in the AI sector — saw a decline of 10%.
“When stocks overreach on the upside, they tend to overreach on the downside as well,” stated Gina Bolvin, president of Bolvin Wealth Management Group, in an email.
The VIX, which measures Wall Street’s fear levels, surged to its highest point of the year. “Extreme fear” has been the prevailing sentiment in markets over the last two weeks, according to CNN’s Fear and Greed Index.
“This uncertainty has been pervasive in the market,” said Saglimbene.
Bitcoin fell to approximately $78,000 on Monday — its lowest level since November — amid a broad selloff of high-risk assets.
Stocks have faced significant pressure this month amid ambiguities surrounding Trump’s fluctuating tariff proposals. The S&P 500 dropped 3.1% last week, marking its worst weekly performance since September.
“The stock market is losing faith in the policies of Trump 2.0,” remarked Ed Yardeni, president of Yardeni Research.
Trump threatened to impose a hefty tariff on imports from Canada and Mexico but later announced a delay until April 2. He increased the tariff on all Chinese imports to 20% from 10%, while a 25% tariff on all steel and aluminum imports is scheduled to start on March 12. Additionally, Trump warned last week about a potential 250% tariff on Canadian dairy products and a “significantly high” tariff on lumber. On Sunday, he mentioned on Fox that tariffs might still “increase over time.”
“The discussions around tariffs often create more turmoil than their actual implementation,” stated David Bahnsen, chief investment officer at the Bahnsen Group. “The talk of tariffs, reversals, speculation, and chaos breeds uncertainty.”
“I doubt the administration fully understands how the tariff situation will unfold, but if I were to wager, I’d say it will linger long enough to harm economic activity for at least a quarter or two, ultimately culminating in agreements with different nations that leave everyone wondering why we went through all this trouble,” he noted in a statement on Monday.
Further signs of strain are emerging: layoffs are increasing, hiring is stalling, consumer confidence is dropping, and inflation is rising.
The yield on the 10-year U.S. Treasury dipped to 4.225% as investors flocked to government bonds, reflecting concerns regarding uncertainty and economic growth.
Looking ahead this week, investors are expected to focus on upcoming monthly inflation data scheduled for Wednesday and Thursday to assess whether inflation remained persistently high in February.
A recession is typically defined as two consecutive quarters of negative gross domestic product growth. The National Bureau of Economic Research’s Business Cycle Dating Committee, which officially defines recessions, states that a recession “involves a significant decline in economic activity that is widespread across the economy and lasts more than a few months.”
“The duration of this period of investor caution will depend on how swiftly the global trade tensions and the ensuing risk of recession dissipate,” indicated Sam Stovall, chief investment strategist at CFRA Research, in a note shared on Monday.