United States stocks plunged Monday as the Dow fell by more than 900 points amid growing economic concerns. The S&P 500 dropped by 2.7% while the tech-heavy Nasdaq Composite plummeted 4%, entering correction territory, according to CNN.
CNN notes that tech stocks led the selloff with all "Magnificent Seven" companies in the red. On Monday, Tesla closed down 15.4%. Though the stock railed after November’s U.S. election, it has since tumbled 45% this year, erasing its previous gains.
Wall Street's fear gauge, the VIX, surged to its highest level this year with "extreme fear" driving markets for the past two weeks, as tracked by CNN's Fear and Greed Index. According to David Bahnsen, chief investment officer at the Bahnsen Group, quoted by CNN, "The talk of tariffs is, in a lot of ways, worse than the implementation of them," highlighting that the uncertainty around Trump's tariff policies is significantly impacting market sentiment.
Trump indicated on Fox News' "Sunday Morning Futures" that the economy will experience "a period of transition" because "what we're doing is very big," as reported by CNBC, which detailed the administration's efforts to prepare Americans for potential economic challenges.
When directly asked about recession prospects, Trump avoided making specific predictions, telling Fox, "I hate to predict things like that," while acknowledging potential disruption ahead.
CNBC highlights that this new messaging represents a shift from Trump's first term, when he frequently pointed to stock market performance as evidence of his success. "You can't really watch the stock market," Trump now advises, emphasizing his focus on building "a strong country" instead. Treasury Secretary Scott Bessent described the current situation as a "detox period" from government spending in a CNBC interview, suggesting any slowdown stems from moving "away from public spending to private spending."
Despite concerning signals like the Atlanta Federal Reserve's GDP Now tracker indicating a potential 2.4% decline in first-quarter growth, Commerce Secretary Howard Lutnick confidently told NBC News there's "no chance" of recession, CNBC reports, with administration officials maintaining that current economic disruptions are merely temporary adjustments necessary for future growth.
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