ears of a possible recession in the U.S. economy led to a major sell-off in the stock market on Monday.
Stocks dropped on Monday, with the three major indexes – Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite – all opening and closing in the red.
This market shock follows three consecutive weeks of declines for the S&P 500. This time, however, all seven of the major tech stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla – saw losses.
The Dow ended the day down by 890 points – 2.08% – slightly recovering from a loss of over 1,100 points earlier in that day. The S&P 500 dropped by 2.7%, while the Nasdaq Composite had its worst day since 2022, with a drop of 4%. This also marked the worst day of the year for both the Dow and S&P 500.
The broad market sell-off is mainly fueled by concerns over the potential effects of the new tariff regulations imposed by President Trump. In an interview, the president stated that there would be “a period of transition” in the U.S. economy and did not dismiss the possibility of a recession. This led to heightened uncertainty among investors.
Anthony Saglimbene, the Chief Market Strategist at Ameriprise stated that “President Trump’s comments not necessarily taking a recession off the table unnerved investors who were already unnerved.”
This is further contributing to the market decline, Saglimbene also saying that “this uncertainty has been swirling in the market.”
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Unfortunately, this is currently hammering the retirement and savings accounts of thousands, if not millions of Americans. However, Trump’s agenda is to have a long-term economic strategy in place, with the goal of revitalizing the U.S. industries, even if it means enduring short-term market volatility.
"Many investors support the president's pro-growth business agenda, but the administration's frenetic approach to policymaking is unsettling.” – explained Michael Arone, State Street Global Advisors’ Chief Investment Strategist.
Meanwhile, Asian and European markets also showed mixed results on Tuesday morning, suggesting that the market volatility happening in the United States could contribute to global instability.
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