Tech stocks and consumer giants sink as market volatility rises, with investors questioning economic risks
Wall Street faced a sharp sell-off on Monday as investors questioned how much economic strain US President Donald Trump would tolerate to push through his tariff policies.
According to BNN Bloomberg, concerns over tariffs and economic uncertainty drove a broad market decline.
The S&P 500 fell 2.7 percent, nearing a 9 percent drop from its all-time high set last month.
At one point, the index was down 3.6 percent and headed for its worst trading day since 2022, when high inflation fueled recession fears.
The Dow Jones Industrial Average dropped 890 points, or 2.1 percent, after earlier losses exceeded 1,100 points. The Nasdaq composite saw a steeper decline, losing 4 percent.
The volatility continued a pattern in which the S&P 500 has fluctuated by more than 1 percent in seven of the last eight trading sessions, driven by Trump’s inconsistent approach to tariffs.
Concerns have grown that these market swings could slow the economy or create uncertainty that discourages businesses and consumers from spending.
Signals of economic weakness have already emerged, particularly in business sentiment surveys showing increased pessimism. A real-time indicator from the Federal Reserve Bank of Atlanta suggests the US economy may already be contracting.
Trump addressed the economic outlook in a Fox News Channel interview over the weekend.
When asked about the possibility of a 2025 recession, he responded, “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 defended tariffs as a tool to bring manufacturing jobs back to the US. His Treasury Secretary, Scott Bessent, described a potential economic “detox” period as the government reduces spending.
The administration has pursued cuts to federal expenditures, workforce reductions, and increased deportations, moves that could impact job markets.
Although hiring remains stable and the economy ended last year with solid growth, economists have lowered their forecasts for 2025.
Goldman Sachs economist David Mericle reduced his US growth projection to 1.7 percent from 2.2 percent, citing the likelihood of broader tariffs.
He estimated a 20 percent chance of recession over the next year, noting that the White House could adjust policy if risks to the economy become severe.
Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley, said, “There are always multiple forces at work in the market, but right now, almost all of them are taking a back seat to tariffs.”
The market downturn has affected some of its most prominent stocks, particularly in the technology sector. Nvidia declined 5.1 percent on Monday, bringing its 2025 losses to more than 20 percent after surging nearly 820 percent across 2023 and 2024
Tesla dropped 15.4 percent, deepening its 2025 decline to 45 percent.
The electric vehicle maker initially saw a post-election boost due to CEO Elon Musk’s relationship with Trump but has since struggled amid concerns over its brand association with Musk.
Protests targeting Tesla dealerships have added to investor concerns.
Consumer-sensitive stocks also suffered, with Carnival cruise lines falling 7.6 percent and United Airlines losing 6.3 percent.
Beyond equities, investors have pulled back from other high-momentum assets, including bitcoin. The cryptocurrency’s value has fallen below US$80,000, down from more than US$106,000 in December.
As economic worries mount, investors have turned to US Treasury bonds, pushing their prices higher and yields lower.
The yield on the 10-year Treasury dropped to 4.22 percent from 4.32 percent on Friday, continuing its decline from January’s near 4.80 percent level.
Despite market turbulence, dealmaking activity has not ceased. Redfin’s stock soared 67.9 percent after Rocket announced an all-stock acquisition valuing the digital real estate brokerage at US$1.75bn.
Rocket’s stock, however, fell 15.3 percent. ServiceNow dropped 7.9 percent after announcing a US$2.85bn cash-and-stock acquisition of AI-assistant company Moveworks.
Major US stock indexes saw significant declines by the close of trading.
The S&P 500 lost 155.64 points to finish at 5,614.56. The Dow Jones Industrial Average dropped 890.01 points to 41,911.71, while the Nasdaq composite fell 727.90 points to 17,468.32.
Overseas, European markets broadly declined following mixed results in Asia. Hong Kong’s index fell 1.8 percent, while Shanghai’s dropped 0.2 percent.
China reported that consumer prices decreased in February for the first time in 13 months, highlighting continued weakness in the world’s second-largest economy.
Persistent low demand, combined with an early Lunar New Year holiday, contributed to the decline.
