The US stock market took a major hit on Monday, shedding over $1.75 trillion in value following comments from President Donald Trump that left open the possibility of a recession this year. The S&P 500 dropped 2.7%, falling nearly 9% below its all-time high set on February 19. The Nasdaq 100 plunged 3.81%, marking its biggest single-day loss since September 2022.
Tesla, under the leadership of CEO Elon Musk, saw some of the heaviest losses, with its stock plummeting 15.43%.
The sharp declines have now left both the S&P 500 and Nasdaq 100 at their lowest levels since September 2022, after two weeks of heavy selling. The market rout also continued in Asia on Tuesday morning, with Japan’s Nikkei 225 and Taiwan’s TAIEX each falling more than 2.5%, and Hong Kong’s Hang Seng slipping around 1.5%.
The selloff comes amid growing concern over Trump’s tariff policies, with investors increasingly unnerved by his inconsistent announcements. Trump’s decision to impose steep tariffs on goods from Mexico, Canada, and China, combined with mixed messages regarding the timeline of these measures, has caused confusion and fueled fears of an economic slowdown, potentially even a recession.
In a Fox News interview aired Sunday, Trump acknowledged uncertainty about the economy’s future, saying, “I hate to predict things like that. There is a period of transition, because what we’re doing is very big…It takes a little time, but I think it should be great for us.”
Steve Okun, CEO of APAC Advisors in Singapore, expressed concerns to Al Jazeera, stating, “There’s total uncertainty in the market. [Trump] has no credibility right now when it comes to tariffs, especially with Mexico and Canada. That’s why the markets are reacting the way they are – they don’t know what’s going to happen.”
Trump recently imposed a 25% tariff on imports from Mexico and Canada and doubled tariffs on Chinese goods to 20%. However, two days later, he announced a delay in some duties on Mexican and Canadian goods until April 2. Meanwhile, a 25% tariff on steel and aluminium imports is set to take effect this week.
As a result, major banks have raised their recession forecasts. Goldman Sachs increased the likelihood of a recession within the next 12 months from 15% to 20%, while JPMorgan Chase raised their forecast from 30% to 40% due to the “extreme US policies” under Trump.
On Monday, Peter Tuchman, a trader at the New York Stock Exchange, described the trading session as a “bloodbath”, with fear of a recession dominating the market. “We had a roller coaster last week, with some up days and some down days – and all a function of what is coming out of the Oval Office, which is just complete indecisiveness, confusion, and mixed messaging,” he said, adding that investors were losing confidence in the situation.
Senator Elizabeth Warren, a Democrat from Massachusetts, criticized Trump’s economic policies, saying, “We’re in real economic trouble thanks to the President, and right now, the stock market is a flashing warning light.”
Even Republican Senator Rand Paul from Kentucky voiced concerns about the stock market, stating, “The stock market is comprised of millions of people who are simultaneously trading. The market indexes are a distillation of sentiment. When the markets tumble like this in response to tariffs, it pays to listen.”
Despite the negative sentiment, Kevin Hassett, head of Trump’s National Economic Council, downplayed fears about the economy, calling the recent declines “blips in the data.” He predicted that Q1 2025 would end with positive growth, and Q2 2025 would see a stronger performance as the effects of the tax cuts take hold.
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