Stocks slumped on Monday as Wall Street remained gripped by uncertainty fueled by President Donald Trump’s recent tariff announcements and wavering economic forecasts. The Dow Jones Industrial Average experienced substantial losses, plummeting 805 points or 1.9%. The confluence of rising tariffs and fears of recession weighed heavily on investor sentiment, sending the S&P 500 down 2.7% and the Nasdaq Composite down 4.2%.
Last week was the stock market's most turbulent period, marking its worst performance over the past two years. Economic indicators suggested troubling signs, leading analysts to speculate about the potential for recession within the next year.
“Uncertainty about U.S. trade policy and weaker economic data are leading to investor caution,” said Angeles Investments Chief Investment Officer Michael Rosen, as reported by Quartz. He urged investors to “diversify portfolios out of the U.S. as weaker dollar supports non-U.S. assets.” Companies heavily tied to technology, often dubbed the Magnificent Seven, were not spared; Tesla saw its shares drop by 13%, cancelling out gains from its post-election rally, and Nvidia's stock fell approximately 5% amid growing recession fears.
President Trump imposed sweeping tariffs on imports from Canada, Mexico, and China just last week, which rattled business groups and stoked market anxieties. Goldman Sachs indicated on Friday the likelihood of recession within the next 12 months had risen from 15% to 20%—a warning echoed across major financial institutions. If these tariffs continue, experts concur the risk would amplify substantially.
During his weekend appearance on Fox News with host Maria Bartiromo, Trump refrained from ruling out the possibility of recession this year. “I hate to predict things like this,” he commented. “There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s huge.” Trump's cabinet continued to brush off the market decline, with Treasury Secretary Scott Bessent remarking to CNBC, “The market has just become hooked on government spending. There’s going to be detox period.”
The announcement of 25% tariffs on steel and aluminum imports from the U.S. made headlines this past weekend. Commerce Secretary Howard Lutnick commented on NBC’s “Meet the Press” stating those tariffs would come to pass on Wednesday, and intriguingly downplayed fears of imminent recession. “There’s no need to brace for recession,” he asserted.
The tensions from Trump's tariffs affected broader economic optimism, and the stock market remained volatile, with fears of businesses freezing hiring as they grapple with chaotic trade policies from the administration. The index began the day down again, with the S&P 500 falling 1.5% early on Monday, as the financial sector expected tumultuous weeks leading to potential economic downturn.
Internationally, this unease extended beyond U.S. borders. European markets mirrored these sentiments, plunging as Germany's DAX index fell 0.8%, the CAC 40 dipped 0.2%, and Britain’s FTSE 100 fell 0.3%.
Back at home, stocks such as Apple fell sharply—3.2%—after announcing delays to AI updates for its Siri personal assistant until 2026. Nvidia continued its drop, shedding over 2.6% on Monday, marking its slide for the year at 18.3%. The stock’s dramatic decline stemmed from once soaring levels of demand linked to AI innovations.
Investors remained cautious, flocking to U.S. Treasury bonds, seeking safer options amid uncertainty. Consequently, the yield on the 10-year Treasury fell steadily to 4.24%, contributing to declines across various stock indices.
Bitcoin, too, saw its value dip dramatically, plummeting toward $83,000 from over $106,000 just last December. The rapid changes across the stock and cryptocurrency markets indicated widespread investor apprehension and the potential tremors caused by tariff wars.
Nevertheless, some companies benefited from unexpected breakthroughs. Redfin jumped 77% following the announcement of its acquisition by Rocket Companies for $1.75 billion, though Rocket’s stock took a hit of about 9.7% concurrently.
The turbulent atmosphere on Wall Street continued, poised for new updates on the labor market and inflation, and many investors now grappled with the impact of the shifting trade policies.
Overall, the coming days and weeks will determine whether Wall Street finds solid ground or continues its downward spiral under pressures of domestic and international uncertainties.