US stocks tumbled Monday, continuing a steep sell-off driven by concerns about the impact of President Donald Trump’s tariffs on economic growth.
All three major indexes opened sharply lower Monday after Trump said the US economy would see “a period of transition” and refused to rule out a recession, in an interview that aired Sunday.
When asked on Fox News’ “Sunday Morning Futures With Maria Bartiromo” if he was expecting a recession this year, Trump said “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”
The Dow opened about 400 points, or 1% lower, and was down by 530 points in midday trading. The broader S&P 500 fell by 2.2% and the Nasdaq Composite fell 3.6%.
Tech stocks were leading the selloff Monday, weighing on the S&P 500 and dragging the Nasdaq into correction territory. The “Magnificent Seven” of tech stocks — Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) — were all in the red on Monday.
Tesla slid more than 10% and Nvidia fell 4%. Palantir (PLTR), a star of the artificial intelligence trade, slid 7%. As of Monday morning, Tesla had erased its gains since Trump’s reelection in November.
“When stocks overextend on the upside, they overextend on the downside,” said Gina Bolvin, president of Bolvin Wealth Management Group, in an email.
Stocks have been hammered so far this month amid uncertainty around Trump’s on-again, off-again tariff policy. The S&P 500 slid 3.1% last week, posting its worst week since September.
Trump threatened a massive tariff on imports from Canada and Mexico but then announced a reprieve until April 2. He doubled the tariff on all Chinese imports to 20% from 10%, and a 25% tariff on all steel and aluminum imports is set to take effect March 12. In addition, Trump threatened last week to enact a 250% tariff on Canadian dairy products and a “tremendously high” tariff on its lumber. On Sunday he told Fox that tariffs may still “go up as time goes by.”
“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.”
“I do not believe the administration knows how the tariff situation will play out, but if I were a betting man I would say that it will persist long enough to do damage to economic activity for at least a quarter or two, and ultimately result in a deal with different countries that make everyone wonder why we went through all the fuss,” he said in a note Monday.