Market volatility escalates as economic uncertainties and tariff policies drive U.S. stocks further from record highs.
TWC Magazine: Wall Street’s downturn intensified Monday as mounting economic concerns and President Donald Trump’s tariff policies weighed on investor sentiment, driving U.S. stocks further from their recent record highs.
The S&P 500 dropped 1.4% in early trading, following its worst weekly performance since September. The Dow Jones Industrial Average fell 430 points (1%), while the Nasdaq Composite saw a 2.1% decline by 9:35 a.m. Eastern Time.
This marks the seventh fluctuation of over 1% in the past eight sessions, highlighting the market’s turbulence. Uncertainty surrounding Trump’s on-and-off tariffs has fueled concerns that prolonged policy shifts could dampen consumer and corporate confidence, potentially stalling economic growth. As a result, the S&P 500 has fallen 7.4% from its February 19 all-time high.
Economic Weakness Signals Mount
Key economic indicators suggest potential weaknesses in the U.S. economy. Several business surveys reveal rising pessimism, and real-time data from the Federal Reserve Bank of Atlanta indicates that economic contraction may already be underway.
During a weekend interview with Fox News, Trump was asked about the likelihood of a 2025 recession. He responded, “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. It takes a little time.”
Meanwhile, Commerce Secretary Howard Lutnick confirmed that the 25% tariffs on steel and aluminum imports would take effect Wednesday, further fueling economic uncertainty.
Market Reactions and Big Tech Declines
Despite a steady labor market and a strong economic performance at the end of last year, analysts are trimming their forecasts for 2025. Goldman Sachs economist David Mericle revised his U.S. growth forecast downward from 2.2% to 1.7%, citing the increasing economic impact of tariffs. He also estimated a 20% probability of a recession within the next year.
Some of the hardest-hit sectors include Big Tech and AI-driven stocks, which had previously been market leaders.
- Nvidia plunged 2.6% Monday, extending its year-to-date losses to 18.3%, a stark contrast to its 820% surge over 2023 and 2024.
- Apple dropped 3.2%, becoming the largest drag on the S&P 500, after confirming a delay in its AI-powered Siri update until 2026.
Beyond tech, other speculative assets also saw steep declines. Bitcoin, which had soared in late 2024, tumbled toward $83,000, down from its $106,000 peak in December.
Investors Flee to Safe Havens
Amid market volatility, investors have shifted to U.S. Treasury bonds, seeking stability. This shift has driven bond prices higher and sent yields lower. The 10-year Treasury yield fell to 4.24% from 4.32% late Friday, continuing its downward trajectory from January’s 4.80% peak.
Mergers & Global Market Trends
In corporate news, Redfin surged 77% after Rocket Companies announced an all-stock acquisition worth $1.75 billion. However, Rocket’s stock sank 9.7% on the news.
Globally, European stock indexes mirrored Wall Street’s decline, following a mixed session in Asia. Hong Kong’s Hang Seng Index fell 1.8%, while Shanghai’s Composite Index dipped 0.2%, after China reported its first decline in consumer prices in 13 months, signaling persistent economic weakness exacerbated by the early timing of the Lunar New Year holiday.
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