U.S. stocks took a nosedive Monday morning after President Donald Trump hinted at a rocky economic road ahead, declining to dismiss the chance of a recession in a Sunday interview.
Speaking on Fox News’ “Sunday Morning Futures with Maria Bartiromo,” Trump sidestepped a direct recession prediction, saying, “I hate to call it like that. We’re in a transition phase because what we’re tackling is huge.”
The markets didn’t wait for clarity. The Dow kicked off 400 points down and slid further to a 450-point loss—1.06%—by mid-morning. The S&P 500 shed 2%, while the Nasdaq plummeted 3.2%, with tech stocks bearing the brunt. Tesla (TSLA) cratered over 8%, wiping out its post-election gains since Trump’s November win, Palantir (PLTR) dropped 7%, and Nvidia (NVDA) lost 4%, pushing the Nasdaq into correction territory.
The sell-off caps a brutal month for stocks, rattled by Trump’s erratic tariff moves. The S&P 500 logged a 3.1% tumble last week—its worst since September. Trump’s tariff saga has been a rollercoaster: he floated massive levies on Canada and Mexico imports, only to pause them until April 2, jacked up Chinese import duties from 10% to 20%, and set a 25% tariff on steel and aluminum to start March 12. Last week, he upped the ante with threats of a 250% tariff on Canadian dairy and a “sky-high” hit on its lumber, adding Sunday that rates “might climb higher over time.”
“It’s the tariff chatter, not just the action, that’s poison,” said David Bahnsen, chief investment officer at the Bahnsen Group. “This flip-flopping and guesswork breeds chaos.” In a Monday note, he predicted the tariff mess could drag on, denting the economy for a quarter or two before settling into deals that leave everyone scratching their heads over the drama.
Signs of strain are spreading. Layoffs are piling up, hiring’s cooling, consumer confidence is fraying, and inflation’s creeping higher. The 10-year Treasury yield dipped to 4.218% as investors flocked to bonds, flashing worry over growth prospects.
This week, all eyes are on Wednesday and Thursday’s inflation reports—will February’s numbers show price pressures digging in?
A recession, by the book, means two straight quarters of shrinking GDP, though the National Bureau of Economic Research calls it a “broad, lasting drop in activity” spanning months. “How long investors stay spooked hinges on when these trade storm clouds clear,” said CFRA Research’s Sam Stovall in a Monday note.