The U.S. stock market saw a deeper sell-off on Monday as investors reacted to ongoing economic uncertainties, including trade policies and concerns over tariffs.
The S&P 500 fell 2.7%, bringing it nearly 9% below its all-time high from the previous month. At its lowest point, the index was down 3.6%, marking its worst single-day decline since 2022. That year, rising inflation fueled recession fears, though the economy ultimately avoided a downturn.
The Dow Jones Industrial Average dropped 890 points, or 2.1%, after recovering from an earlier loss of more than 1,100 points. Meanwhile, the Nasdaq composite slid 4%.
Monday’s decline came amid a volatile stretch in the market, with the S&P 500 swinging more than 1% in either direction on seven of the last eight trading days. Market watchers point to uncertainty surrounding trade policies, particularly tariffs, as a key factor driving these fluctuations. Some analysts worry that continued instability could impact economic growth by affecting consumer and business confidence.
Economic indicators have shown mixed signals, with some surveys suggesting increased pessimism among businesses and consumers. A widely followed measure of real-time economic activity, compiled by the Federal Reserve Bank of Atlanta, suggests that U.S. economic growth may be slowing.
When asked over the weekend about the possibility of a recession in 2025, President Donald Trump told Fox News Channel, “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.” He added, “It takes a little time. It takes a little time.”
Trump has cited his push to bring manufacturing jobs back to the United States as one reason for the tariffs. His Treasury Secretary, Scott Bessent, has described the economic transition as a necessary “detox” from government-driven spending. The administration has also been focused on limiting federal expenditures, reducing the size of the federal workforce, and enforcing stricter immigration policies, which could have implications for the job market.
Despite these concerns, the labor market remains strong, with steady hiring reported. The economy finished last year on solid footing, though some economists are lowering their growth forecasts for 2025.
Goldman Sachs economist David Mericle revised his projection for U.S. economic growth from 2.2% to 1.7% for the year, citing expectations that tariffs may be more extensive than initially predicted. He estimated a one-in-five chance of a recession but noted that the administration has room to adjust its policies if economic risks become more pronounced.
“There are always multiple forces at work in the market, but right now, almost all of them are taking a back seat to tariffs,” said Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.
Trump met with technology industry executives on Monday, though the meeting was closed to the media. He did not publicly comment on the stock market’s decline during the day.
Some of Wall Street’s most prominent stocks were hit particularly hard. Large-cap technology companies, which had benefited from the artificial intelligence boom, experienced sharp sell-offs.
Nvidia declined 5.1%, bringing its year-to-date loss to more than 20%, a sharp contrast to its extraordinary surge of nearly 820% over 2023 and 2024. Tesla dropped 15.4%, deepening its 2025 loss to 45%. While Tesla initially saw a post-election boost on expectations of a favorable business climate under Trump, investor sentiment has soured due to concerns about the company’s brand and its association with CEO Elon Musk. Protests against government workforce reductions and other policies have included demonstrations at Tesla dealerships.
Companies dependent on consumer spending also saw declines. Carnival, the cruise line operator, fell 7.6%, while United Airlines dropped 6.3%.
The downturn was not limited to equities. Other high-growth assets, including bitcoin, have seen declines. The cryptocurrency’s value has dropped below $80,000 after reaching more than $106,000 in December.
Investors have instead turned to safer assets like U.S. Treasury bonds. As demand for Treasuries rose, prices climbed, pushing yields lower. The yield on the 10-year Treasury fell to 4.22% from 4.32% on Friday. It has been declining since January, when it neared 4.80%, amid growing concerns about the economy.
Despite market turbulence, deal-making activity continued. Shares of Redfin surged 67.9% after Rocket announced it would acquire the digital real estate brokerage in an all-stock deal valued at $1.75 billion. However, Rocket’s stock fell 15.3% following the news. Meanwhile, ServiceNow dropped 7.9% after the AI platform company announced plans to buy AI-assistant firm Moveworks for $2.85 billion in cash and stock.
By the close of trading, the S&P 500 had fallen 155.64 points to 5,614.56. The Dow Jones Industrial Average lost 890.01 points, ending at 41,911.71, while the Nasdaq composite slid 727.90 points to 17,468.32.
Global markets also saw mixed results. European indexes declined, while Hong Kong’s Hang Seng Index dropped 1.8% and China’s Shanghai Composite edged 0.2% lower. China reported a decline in consumer prices for February, the first such drop in over a year, signaling continued economic challenges in the world’s second-largest economy.
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