- US stocks fell significantly Monday, with the Dow dropping 0.8%, S&P 500 down 1.3%, and Nasdaq plummeting nearly 2%
- Market struggles continue due to concerns about US economic health and Trump’s trade policies, particularly tariff negotiations with Mexico and Canada
- “Magnificent Seven” tech stocks led the sell-off, with Tesla, Alphabet, Meta, and Nvidia showing major declines
- Trump described the economy as going through “a period of transition” when asked about recession fears
- Investors are bracing for important economic data this week, including February Consumer Price Index and Producer Price Index reports
US stock markets dropped sharply on Monday as investors reacted to growing concerns about the health of the economy and President Trump’s trade policies. The selling pressure that began last week continued, with all major indexes recording steep declines.
The Dow Jones Industrial Average fell 0.8%, or about 355 points, to 42,446.56. This marked a continuation of losses from the previous week.
The S&P 500 dropped 1.3% after posting its worst week since September. Last week, the index lost 3.1%, causing worry among market watchers.
The tech-heavy Nasdaq was hit hardest, plummeting nearly 2%. The index has now entered correction territory, having fallen more than 10% from its recent high.
The “Magnificent Seven” tech stocks led the market decline. Tesla shares dropped 6%, while Alphabet fell 4% and Meta lost 3%.
Nvidia, which has been a favorite among AI investors, slipped 2%. Amazon was also down more than 2% in early trading.
Market struggles are being fueled by worries over the US economy’s health. These concerns have become tied to President Trump’s ongoing trade policies.
Tariff negotiations between the US, Mexico, and Canada are dominating headlines. The uncertainty around these trade talks has spooked investors.
In a Sunday interview on Fox News, Trump addressed concerns about a possible recession. He described the economy as going through “a period of transition,” which did little to calm market fears.
Meanwhile, Canada’s political landscape saw a change with Mark Carney becoming the new Liberal Party leader. Carney is expected to take a hard line on tariff negotiations with the US.
More pain ahead
Some market analysts are warning of deeper market drops ahead. Lori Calvasina from RBC Capital Markets said on CNBC that risks are rising for a drawdown of 14% to 20%.
Morgan Stanley’s Michael Wilson has also raised alarms about Trump’s tariff policies. He forecasts the S&P 500 could drop as much as 5% in the first half of the year.
Investors are now preparing for a busy week of economic data. The February Consumer Price Index will be released on Wednesday, followed by the Producer Price Index on Thursday.
These inflation reports will be watched closely by investors concerned about rising prices. The Federal Reserve’s survey of consumer inflation expectations is also due out this week.
This week will see fewer corporate earnings releases compared to recent weeks. Database company Oracle reports on Monday, while software maker Adobe will post results on Wednesday.
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