U.S. Stock Market Sell-Off Deepens amid Tariff Concerns

Wall Street Takes a Hit as Uncertainty Over Trump’s Policies Grows

The U.S. stock market plunged on Monday, with investors increasingly uncertain about how much economic strain President Donald Trump is willing to endure as he pushes forward with his tariff-driven economic strategy. The sell-off sent major indexes tumbling, marking one of the worst days for Wall Street in recent years.

The S&P 500 dropped 2.7%, putting it close to 9% below its all-time high from just a month ago. At one point, it was down 3.6%, on track for its worst day since 2022 when inflation fears fueled recession concerns that ultimately did not materialize.

The Dow Jones Industrial Average fell 890 points, or 2.1%, after briefly dropping more than 1,100 points, while the Nasdaq composite skidded 4% as technology stocks took a heavy hit.

Tariffs and Economic Uncertainty Shake Markets

This decline is the latest in a volatile stretch for the markets, where the S&P 500 has fluctuated by more than 1% in seven of the last eight days. Investors fear that Trump’s on-and-off tariff policies could either weaken the economy directly or create enough uncertainty to slow down business investments and consumer spending.

Over the weekend, Trump refused to predict whether the U.S. economy would enter a recession in 2025, telling Fox News that “we’re bringing wealth back to America,” but that it would “take a little time.”

His administration has maintained that the tariffs are aimed at reviving U.S. manufacturing jobs, but they come alongside cuts in federal spending, reductions in the federal workforce, and increased deportations, all of which could negatively impact the job market.

Goldman Sachs has lowered its economic growth forecast for the U.S. to 1.7% from 2.2% by the end of 2025, citing concerns over Trump’s expanding trade war. Economist David Mericle now sees a 20% chance of a recession, though he noted that the White House could still reverse course if the economic risks grow more severe.

Tech Stocks and AI Giants Suffer Heavy Losses

The biggest casualties of the sell-off were tech stocks and companies that have led the artificial intelligence boom.

• Nvidia tumbled 5.1%, extending its losses for the year to more than 20%. This is a stark reversal from its massive 820% surge over 2023 and 2024.
• Tesla plummeted 15.4%, deepening its losses for 2025 to 45%. Initially, Elon Musk’s close relationship with Trump boosted investor optimism, but concerns over Tesla’s brand image and ongoing protests against U.S. government policies have dragged the stock down.
• Carnival Cruises (-7.6%) and United Airlines (-6.3%) also fell, reflecting consumer fears about financial stability.

Even Bitcoin could not escape the downturn, falling below $80,000 after reaching $106,000 in December.

Treasury Bonds Surge as Investors Seek Safe Haven

As fears of an economic slowdown mount, investors rushed to safer assets. This pushed up the price of U.S. Treasury bonds, sending the 10-year Treasury yield down to 4.22% from 4.32% on Friday.

The bond market has been declining since January, when the 10-year Treasury yield approached 4.80%, signaling growing concerns about economic stability.

Deal-Making Continues Despite Market Turmoil

Despite the volatility, corporate acquisitions are still happening:

• Redfin’s stock skyrocketed 67.9% after Rocket announced a $1.75 billion all-stock acquisition of the digital real estate platform.
• ServiceNow (-7.9%) announced it is buying AI assistant maker Moveworks for $2.85 billion.

Global Markets Also Feel the Impact

Stock markets in Europe and Asia largely fell, with Hong Kong’s Hang Seng index down 1.8%, and China’s Shanghai index slipping 0.2%.

China’s economy showed further signs of weakness, with consumer prices falling for the first time in over a year, reflecting low demand and economic slowdowns a factor that could further complicate global trade.

Looking Ahead: Market Volatility to Continue?

As the uncertainty surrounding Trump’s trade policies and federal budget cuts persists, analysts warn that market swings are likely to continue.

With investors on edge, all eyes are now on the White House and Federal Reserve to see whether policy shifts or economic interventions will help stabilize the markets or push them deeper into turmoil.