US stocks plunge amid recession fears, Nasdaq sees worst day since 2022
A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City on March 10, 2025 (AFP Photo)
Wall Street stocks tumbled Monday as investor concerns mounted over the possibility of a U.S. recession, following U.S. President Donald Trump’s remarks that he would not rule out economic contraction in 2025.
Tech stocks lead market decline
The tech-heavy Nasdaq Composite Index posted its steepest single-day loss since 2022, plummeting 4.0% to close at 17,468.32.
The S&P 500 Index fell 2.7% to 5,614.56, while the Dow Jones Industrial Average dropped 2.1% to 41,911.71.
Major technology stocks took a hit, with Tesla leading losses after its shares fell 15.4%. Other members of the so-called “Magnificent Seven” stocks, including Google parent Alphabet, Amazon, Meta, and Nvidia, also suffered sharp declines.
Trump’s tariff policies stoke market uncertainty
Investor concerns have intensified over the impact of Trump’s tariff policies, which have already introduced significant volatility in global markets.
Since taking office in January, Trump has imposed sweeping tariffs on imports from Canada, Mexico, and China, though some levies on U.S. neighbors were later eased.
Another wave of tariffs is expected this week, with 25% duties on steel and aluminum set to take effect Wednesday. “Ongoing confusion about tariffs and concerns that maybe the DOGE cuts are excessive led to a drop in consumer sentiment and are now leading to fears of a slowdown or higher inflation or both,” said Steve Sosnick of Interactive Brokers, referring to spending cuts overseen by Trump’s advisor Elon Musk and his Department of Government Efficiency (DOGE)
Economic indicators signal growing pessimism
While Trump officials have emphasized positive long-term economic trends, data suggests a growing sense of uncertainty among consumers.
The New York Federal Reserve’s latest Survey of Consumer Expectations showed a decline in household confidence regarding their financial future, with rising expectations of unemployment and credit access difficulties.
The Atlanta Federal Reserve’s GDPNow tracker has also pointed to a possible economic contraction in the first quarter of 2025, driven in part by tariff-related trade disruptions.
“There are a lot of reasons to be extremely bullish about the economy going forward. But for sure, this quarter, there are some blips in the data,” said National Economic Council head Kevin Hassett.
Goldman Sachs adjusts growth forecasts
Amid increasing tariff concerns, economists at Goldman Sachs have revised their U.S. economic outlook downward. They lowered their 2025 growth forecast and raised inflation expectations, citing “more adverse tariff assumptions.”
Trump has imposed an additional 20% tariff on Chinese imports and 25% tariffs on Canadian and Mexican goods, though most of these duties have been temporarily suspended until April 2.
The administration plans to introduce a broader tariff framework at that time, further fueling uncertainty.
Investor sentiment and market reaction
The volatility in markets extended beyond equities. The Cboe Volatility Index (VIX), a key measure of investor fear, spiked to its highest level since December.
The uncertainty also impacted the cryptocurrency market, with Bitcoin falling below $80,000.
Despite market turmoil, Hassett struck an optimistic note, arguing that tax cuts would ultimately boost the economy. “What I think is going to happen is the first quarter will barely stay in the positive category, and then the second quarter will take off as everyone sees the reality of the tax cuts,” he said.
