The stock market saw a sharp decline on Monday as fears of a U.S. recession grew.
The Dow Jones Industrial Average dropped nearly 900 points, while the S&P 500 fell 2.7%, and the Nasdaq Composite tumbled 4%. The selloff was particularly harsh on big tech companies, with Tesla seeing a staggering 15% loss. Other members of the Magnificent Seven—Apple, Microsoft, Alphabet, Amazon, Nvidia, and Meta Platforms—saw declines between 2% and 5%.
The market’s woes were fueled by comments from President Trump over the weekend. In an interview with Fox News, Trump did not rule out the possibility of a recession this year, stating that there would be a “period of transition” due to the administration’s major economic shifts. In contrast, Commerce Secretary Howard Lutnick appeared more optimistic, telling NBC News, “There’s going to be no recession in America.”
Investors were rattled by the president’s tone, as many had believed the Trump administration’s pro-growth policies would help the economy. Shelby McFaddin, an investment analyst at Motley Fool Asset Management, pointed out that this was the first time in recent memory that an administration had openly acknowledged the potential for economic pain.
Adding to the uncertainty was Friday’s jobs report, which showed that while the labor market remains steady for now, there are concerns that it could weaken in the coming months. Some analysts worry about job losses due to ongoing deportation efforts and government layoffs as part of the administration’s broader policies.
George Cipolloni, portfolio manager at Penn Mutual Asset Management, commented on the shift in the political landscape: “We have an administration that’s radically different from the last one. We have a whole other set of concerns that could actually lead us back to a potential hard landing.”
This significant market downturn follows a volatile week, with growing concerns about the Trump administration’s unpredictable tariff policies and their impact on U.S. growth. The S&P 500 ended last week with a 3.1% weekly drop, marking its biggest decline in six months.
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