U.S. stocks took a sharp dive on Monday, with Wall Street experiencing its worst day of the year amid growing concerns about President Donald Trump’s economic policies, particularly his stance on tariffs. The selloff, which saw all three major indexes open sharply in the red, continued throughout the day, despite a brief afternoon rally.
The Dow Jones Industrial Average closed down 890 points, or 2.08%, rebounding slightly from a loss of over 1,100 points earlier in the session. The broader S&P 500 fell 2.7%, while the tech-heavy Nasdaq Composite plunged 4%. The Nasdaq’s drop marked its biggest single-day decline since September 2022, and both the Dow and S&P 500 posted their worst days of 2023.
Tech Stocks Lead the Selloff
The market turmoil was largely driven by investor anxiety surrounding President Trump’s recent comments about the economy. Trump stated in an interview that the U.S. could be facing “a period of transition,” adding that he would not rule out the possibility of a recession. His remarks unnerved investors already on edge from ongoing tariff concerns. The S&P 500 is now down 8.6% from its February 19 record high, with tech stocks particularly hard-hit.
Shares of major technology companies, collectively known as the “Magnificent Seven,” including Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, all saw significant losses on Monday. Tesla, in particular, saw a steep drop, closing down 15.4%. Since the U.S. presidential election in November, Tesla’s stock has fallen nearly 45%, erasing its gains from that period. The company has faced mounting pressure, including protests over CEO Elon Musk’s ties to the Trump administration and declining sales in Europe.
Uncertainty Over Tariffs Drives Fear
The selloff also highlighted growing uncertainty about Trump’s trade policies. The president has been vocal about his intention to implement significant tariffs on various imports. After threatening a large tariff on imports from Canada and Mexico, Trump temporarily delayed it until April 2. He also announced an increase in the tariff on Chinese imports from 10% to 20%, and the 25% tariff on steel and aluminum imports is set to take effect on March 12.
The constant back-and-forth and speculation surrounding these tariffs have created significant market uncertainty. “The talk of tariffs is, in a lot of ways, worse than the implementation of them,” said David Bahnsen, chief investment officer at the Bahnsen Group. “The tariff talk, reversal, speculation, and chaos only fosters uncertainty.”
Wall Street Fear Gauge Reaches Yearly High
The market’s anxiety was reflected in Wall Street’s fear gauge, the VIX, which surged to its highest level this year. CNN’s Fear and Greed Index indicated that “extreme fear” has been driving the markets in recent weeks. “This uncertainty has been swirling in the market,” said Anthony Saglimbene, chief market strategist at Ameriprise.
Bitcoin Hits Lowest Point Since November
In addition to the stock market plunge, Bitcoin also took a hit, falling to around $78,000, its lowest level since November. The selloff of risky assets contributed to the cryptocurrency’s decline, reflecting broader investor sentiment.
Trump’s Economic Vision Under Scrutiny
The volatile day on Wall Street follows increasing concerns about the economic direction under Trump’s second term. White House spokesperson Kush Desai defended the president’s economic agenda, emphasizing that Trump’s “America First” policies would lead to “historic” growth in the coming years, with significant investments and job creation. However, analysts and lawmakers are concerned about the long-term effects of tariffs and trade disruptions.
As market volatility continues and uncertainty over Trump’s policies grows, investors remain on edge, unsure of what direction the U.S. economy will take in the coming months. The market’s reaction suggests that the upcoming months may be crucial in determining the overall impact of the administration’s economic strategies.
