An IMGW News Report
Wall Street suffered a sharp sell-off on Monday as fears mounted that Donald Trump’s tariff policies could tip the US economy into recession. The Nasdaq plunged 4%—its steepest decline since 2022—while the S&P 500 and Dow Jones fell 2.7% and 2.1% respectively. Tech stocks bore the brunt, with Tesla sliding 15.4% and Nvidia shedding over 5%.
The rout followed Trump’s remarks on Fox News, where he described the economy as being in a “transition” but declined to rule out the risk of a downturn. “What we’re doing is very big,” he said. “We’re bringing wealth back to America.”
The White House moved swiftly to downplay concerns. A senior official insisted that business sentiment, not market fluctuations, was the best measure of economic health. Another spokesman, Kush Desai, claimed that Trump’s trade policies had already prompted “trillions” in new investment commitments.
Investors appear less convinced. Markets had rallied after Trump’s election, buoyed by expectations of tax cuts and deregulation. That optimism has since faded amid fears that tariffs—essentially taxes on imports—will stoke inflation and curb growth.
Industry experts warn that Trump’s sweeping tariffs will inevitably push up costs. The president introduced the measures in retaliation against China, Mexico, and Canada, accusing them of failing to curb migration and drug trafficking—allegations all three nations have firmly denied.
The impact is already visible. Higher import duties threaten to push up manufacturing costs, particularly in the car industry, where firms rely on cross-border supply chains. Tesla, which sources components from Canada and Mexico, saw its shares nosedive as investors priced in the risks.
Some of Trump’s advisers remain bullish. Kevin Hassett, speaking to CNBC, dismissed concerns over a slowdown, arguing that tariffs were already bringing jobs back to the US. He attributed any economic “blips” to short-term market jitters and what he called the “Biden inheritance.”
But Wall Street’s mood is shifting. Investors, initially enamoured with Trump’s pro-business rhetoric, are beginning to rethink their bets. As inflationary pressures build and businesses hold off on spending, the markets are flashing warning signals.
