Wall Street suffered a severe downturn Monday as investors reacted to President Donald Trumps refusal to rule out a recession.
The Dow Jones Industrial Average plummeted 890 points (2.08%) to close at 41,911.71, marking its worst performance of 2025.The S-P 500 dropped 155.64 points (2.7%) to 5,614.56, while the tech-heavy Nasdaq Composite experienced its steepest single-day decline since September 2022, tumbling 727.90 points (4%) to 17,468.32.The Russell 2000 index of smaller companies fell 0.7% to 2,019.07.
Tesla led the market rout with a 15.4% drop following reduced delivery expectations and declining vehicle shipments in China.Other tech giants also suffered, with Palantir Technologies falling 10% and Nvidia dropping 5%.
The selloff erased all gains made by major indices since the November presidential election.Investors now worry about the economic impact of Trumps tariff policies on Canada, Mexico, and China.
These concerns intensified after Trumps weekend interview where he mentioned a period of transition for the economy.Nasdaq Sinks 4% in Historic Drop, Fuels Bear Market Concerns.
(Photo Internet reproduction)A lot of strategies that previously worked are now failing, noted Ayako Yoshioka, senior investment strategist at Wealth Enhancement.
The market uncertainty has pushed investors toward safer assets, with Treasury yields falling significantly.Market Volatility and Investor CautionTrading volumes surged during Mondays session.
The NYSE composite volume reached 6.5 billion shares, exceeding 125% of the average over the past 30 days.
Meanwhile, the VIX, Wall Streets fear gauge, hit its highest level this year.The market downturn extends beyond stocks.
Bitcoin slipped to approximately $78,000, its lowest point since November.
Analysts attribute this broad decline to uncertainty surrounding Trumps inconsistent tariff policies.Wall Street strategists have begun moderating their optimistic forecasts for 2025.
JPMorgan analysts warned clients to prepare for volatility as they cautioned that their year-end S-P 500 target might face challenges amid increasing uncertainty.The S-P 500 now sits approximately 8.6% below its February 19 record high, approaching correction territory.
Investors await inflation data, job openings, and consumer confidence reports later this week for further market direction.