US markets suffered a sharp selloff on Monday as investor concerns deepened over President Donald Trump’s economic policies, triggering steep losses in stocks and Bitcoin. The downturn followed Trump’s refusal to rule out the possibility of a recession, unsettling markets already on edge over his tariff-driven trade agenda.
All three major stock indices opened lower and extended their declines throughout the session. The Dow Jones Industrial Average dropped 890 points after earlier falling over 1,100 points. The S&P 500 lost 2.7%, while the tech-heavy Nasdaq Composite plunged 4%, marking its worst single-day performance since September 2022.
According to a Reuters report, Trump’s tariff policies have rattled investors, wiping out $4 trillion from the S&P 500’s peak last month. Technology stocks bore the brunt of the selloff, pushing the Nasdaq deeper into correction territory. The S&P 500 closed 8.6% below its February 19 peak. Major tech giants, including Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA), posted losses. Tesla tumbled 15.4%, extending its year-to-date decline to nearly 45%, amid falling sales in Europe and backlash over CEO Elon Musk’s ties to the Trump administration.
“The stock market is losing its confidence in the Trump 2.0 policies,” said Ed Yardeni, President of Yardeni Research. Market strategist Anthony Saglimbene of Ameriprise added, “President Trump’s comments not necessarily taking a recession off the table unnerved investors who were already unnerved.”
Bitcoin also saw a steep decline, plunging to around $78,000—its lowest level since November—as investors moved away from high-risk assets. Meanwhile, the CBOE Volatility Index (VIX), often called Wall Street’s “fear gauge,” surged to its highest level of the year.
The White House sought to downplay market concerns, insisting that Trump’s economic policies would drive long-term growth. White House spokesman Kush Desai said, “Since President Trump was elected, industry leaders have responded to President Trump’s America First economic agenda of tariffs, deregulation, and the unleashing of American energy with trillions in investment commitments that will create thousands of new jobs.”
Despite these assurances, economic warning signs persist. The stock market has suffered its worst week since the November election, and consumer confidence has weakened as inflationary pressures mount. Trump’s recent decision to double tariffs on Chinese imports from 10% to 20%, along with a 25% tariff on steel and aluminum set to take effect on March 12, has heightened concerns. Additionally, he has threatened a 250% tariff on Canadian dairy products and further levies on lumber imports.
Amid rising economic uncertainty, investors flocked to safer assets, pushing the yield on the 10-year US Treasury bond down to 4.225%. Market analysts are now focused on key inflation data set for release later this week to assess whether price pressures remain persistent.
A recession is typically defined as two consecutive quarters of negative GDP growth. The last US recession occurred in early 2020 during the Covid-19 pandemic, which led to widespread job losses and economic contraction.
Trump refuses to rule out recession, says economy in ‘transition’ amid market turmoil
Trump on Sunday declined to provide a clear answer on whether the country is headed for a recession, instead offering a vague response. “I hate to predict things like that,” he said in an interview on Fox News’ Sunday Morning Futures With Maria Bartiromo when asked about the possibility of an economic downturn in 2025. “There is a period of transition, because what we’re doing is very big—we’re bringing wealth back to America,” he said. “It takes a little time.”
Trump’s commerce secretary, Howard Lutnick, was more direct in dismissing concerns. “Absolutely not,” he told NBC when asked whether Americans should brace for an economic downturn.
However, economic challenges continue to mount. The stock market just wrapped up its worst week since the November election, and consumer sentiment has declined as shoppers worry about rising prices driven by Trump’s shifting tariffs on Canada, Mexico, and China.
Adding to uncertainty, mass layoffs persist across several government agencies, with billionaire advisor Elon Musk overseeing widespread job cuts. When reporters pressed Trump again about the possibility of a recession aboard Air Force One, he responded with a noncommittal remark: “Who knows?”
Economic indicators raise alarms
The Atlanta Federal Reserve now predicts a 2.4% contraction in GDP growth for the first quarter of 2025, which would be the worst performance since the Covid-19 pandemic.
Kevin Hassett, Trump’s chief economic advisor, suggested on ABC that tariffs might become permanent. He explained that their duration depends on how the targeted countries respond. If they fail to meet US demands, the tariffs could remain in place as part of a new economic equilibrium, he said.
In his State of the Union speech, Trump told Americans to expect “a little disturbance” as tariffs take effect. “We’re okay with that. It won’t be much,” he insisted.
However, economic experts remain cautious. Goldman Sachs raised its estimate of a US recession in the next 12 months from 15% to 20%. Morgan Stanley also predicted weaker growth than expected.
A recession is typically defined as two consecutive quarters of negative GDP growth. The last US recession occurred in early 2020 during the Covid-19 crisis, when millions lost jobs.
(Inputs from Reuters and ANI)
