Concerns about US President Donald Trump’s economic policy led to a broad market sell-off
Washington, DC: CNN said that worries over US President Donald Trump’s economic policies caused a worldwide market selloff on Monday, sending US equities plunging, bitcoin plunging, and the Wall Street fear index hitting its highest level.”
All three of Wall Street’s main indexes opened lower, signaling the start of the collapse. Throughout the day, US markets declined, and even though they briefly rallied in the afternoon, they ended the day worse.
The Dow recovered from a loss of more than 1,100 points at one point to finish down by 890 points. Both the tech-heavy Nasdaq Composite and the more general S&P 500 fell, falling 2.7% and 4%, respectively.
It was the largest one-day decline on the Nasdaq since September 2022. Furthermore, the S&P 500 and Dow both had their worst day of the year.
All three main indices have lost their gains since the US presidential election in November, and the drop prolonged a dismal month for markets. Concerns about the impact of Trump’s tariff strategy were a big factor in the broad selloff.
Trump said that the US economy will experience “a period of transition” in an interview that aired on Sunday, but he did not rule out the potential of a recession. He said these things in an interview with “Sunday Morning Futures With Maria Bartiromo” on Fox News.
Trump said, “I hate to predict things like that,” in response to a question about whether he anticipated a recession this year. Because of the size of what we’re doing, there is a transitional phase.
The selloff, which pulled the Nasdaq into a correction zone and put pressure on the S&P 500, was driven by tech firms. The S&P 500 had a decline of 8.6% from its peak on February 19. Tech companies had losses on Monday, including Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA).
According to Anthony Saglimbene, chief market strategist at Ameriprise, “investors who were already unnerved were unnerved by President Trump’s remarks that a recession is not necessarily out of the question.”
On Monday, the White House declared that Donald Trump will lead “historic” growth in his second term as president of the United States. In a statement, Kush Desai, the White House “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.”
Desai said, “President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term.”
On Monday, Tesla closed down 15.4%. After the US presidential election in November, Tesla’s stock increased. But this year, Tesla’s stock has dropped by over 45%. Protests against Tesla CEO Elon Musk for his excessive involvement in the Trump administration and declining sales in Europe have hurt the company’s stock in recent weeks.
Palantir (PLTR), another artificial intelligence industry star, had a 10% decline in share price, while Nvidia’s shares fell 5%. This year, Wall Street’s fear index, the VIX, rose to its greatest level. ” Amidst a selloff of riskier assets, Bitcoin fell to around USD 78,000 on Monday, its lowest level since November.
Because of the uncertainty surrounding Trump’s tariff stance, equities have been negatively impacted so far this month. Last week was the worst week for the S&P 500 since September, with a 3.1% decline. According to Ed Yardeni, president of Yardeni Research, “The stock market is losing its confidence in the Trump 2.0 policies.”
Trump has threatened to impose tariffs on Mexican and Canadian goods. He subsequently said, nevertheless, that the tariffs will take effect in April. He boosted the 10 percent tax on all imports from China to 20 percent, and on March 12 he plans to impose a 25 percent tariff on all imports of steel and aluminum.
Additionally, Trump warned last week to put a “tremendously high” charge on Canadian timber and a 250 percent tariff on dairy exports. He said in an interview with Fox News that tariffs may still “go up as time goes by.”
As investors seized government bonds, the yield on the 10-year US Treasury dropped to 4.225 percent, reflecting worries about economic growth and uncertainties. In order to determine if inflation remained obstinate in February, investors will be watching this week’s monthly inflation report, which is anticipated on Wednesday and Thursday. Two consecutive quarters of negative GDP growth are generally used to characterize a recession.
