 "A Wall Street sign hangs in front of a US Flag outside the New York Stock Exchange (NYSE) in New York City, US. Reuters")
US stocks tumbled on Monday over growing fears of an economic slowdown after President Donald Trump did not rule out the possibility of his tariffs causing a recession.
The Nasdaq dropped 4.0 per cent, marking its biggest single-day loss since 2022, with tech stocks hit the hardest, whereas the S&P 500 fell 2.7 per cent, and the Dow Jones Industrial Average dropped 2.1 per cent.
Tesla shares plunged 15.4 per cent, while chipmaker Nvidia fell over 5 per cent. Other major tech companies, including Meta, Amazon, and Alphabet, also saw significant declines.
Trump’s remarks on tariffs came after he was asked about concerns over a possible recession. He described the US economy as being in a “period of transition.”
In an interview with Fox News, recorded on Thursday and aired on Sunday, Trump highlighted the worries but avoided making predictions. “I hate to predict things like that,” he said. “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.”
During the interview, Trump said tariffs are meant to bring manufacturing jobs back to the US.
His Treasury Secretary, Scott Bessent, warned the economy might go through a “detox” as it adjusts to less government spending. The White House is cutting federal spending, reducing the federal workforce, and increasing deportations, which could impact the job market.
Impact Shorts
View AllIndustry leaders backs Trump: White House
Earlier, White House spokesman Kush Desai said that “industry leaders” had backed Trump’s policies, including tariffs, by committing trillions in investments.
However, economic analysts worry that growth could slow while prices continue to rise.
US economy showing signs of slow down
The US economy is showing signs of slowing down, with surveys indicating growing pessimism, news agency AP reported. Real-time data from the Federal Reserve Bank of Atlanta also suggests that the economy might already be shrinking.
The US job market also remains stable for now, and the economy finished last year strong. However, economists are lowering their predictions for this year’s economic performance.