New York
CNN
Wall Street saw a major drop on Monday, with US stocks tumbling and the Dow Jones Industrial Average falling over 1,100 points. This marked the largest decline in a single day since December.
The selloff was largely fueled by worries about the impact of President Donald Trump’s tariffs on the economy. In a recent interview, Trump mentioned we might experience a “period of transition” and didn’t rule out the risk of a recession.
On “Fox News’ Sunday Morning Futures,” when asked if he expected a recession soon, Trump replied, “I hate to predict things like that.” He acknowledged the ongoing changes were significant.
By the afternoon, the Dow was down 2.6%. The S&P 500 dropped 3.5%, and the tech-heavy Nasdaq Composite fell 4.9%. The tech sector led the declines, pushing the S&P 500 down nearly 9% from its highest point in February.
Major tech companies, including Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, all experienced losses, contributing to the overall market downturn.
According to Anthony Saglimbene, chief market strategist at Ameriprise, Trump’s comments unsettled investors who were already on edge.
Tesla’s stock dropped 14.8% on Monday. Despite a surge after the US presidential election, it has fallen over 44% this year, erasing those gains. Recent weeks have seen Tesla in the spotlight for controversies involving CEO Elon Musk and his ties to the Trump administration, as well as declining sales in Europe.
Other notable losses included Nvidia, which fell 5%, and Palantir, dropping 10%. Gina Bolvin from Bolvin Wealth Management pointed out that when stocks rise rapidly, they can also fall just as steeply.
The VIX, known as Wall Street’s fear gauge, climbed to its highest level this year, reflecting a sentiment of “extreme fear” among investors.
Bitcoin hit $78,000—its lowest level since November—as risky assets faced selling pressure.
This month, stocks have struggled due to uncertainty stemming from Trump’s fluctuating tariff policies. The S&P 500 had its worst week since September, dropping 3.1% last week.
Ed Yardeni, president of Yardeni Research, noted that the market is losing confidence in Trump’s economic policies. Recent tariff threats against Canada and Mexico have only added to the uncertainty, along with rising inflation and slowing hiring.
Investors have been buying government bonds, which pushed the yield on the 10-year US Treasury down to 4.215%, signaling concerns about future economic growth. Layoffs are increasing, and consumer confidence is starting to falter.
This week, investors are keenly watching for monthly inflation data set to be released. Understanding whether inflation remains high will be crucial for gauging the market’s direction.
A recession is typically defined as two consecutive quarters of negative GDP growth, according to the National Bureau of Economic Research.
Sam Stovall, chief investment strategist at CFRA Research, mentioned that the length of investor caution largely depends on how quickly global trade concerns clear up.
This story is developing and will have updates.
