Wall Street faced a rough start to the trading week, with major indexes tumbling as investors reacted to President Donald Trump’s worrying comments in which he refused to rule out a recession.
The Dow Jones Industrial Average, the Nasdaq Composite and the S&P 500 all posted significant declines on Monday, with the tech sector leading the downturn.
The S&P 500 fell more than 2.5%, continuing last week’s steep decline, while the Nasdaq Composite dropped by nearly 4%, extending its recent struggles.
The Dow Jones Industrial Average also saw heavy losses. It fell nearly 800 points, or 1.8% as of 1:45 p.m. Eastern Time, with volatility persisting amid concerns over economic growth and monetary policy.
Trump and his advisors have spent recent days trying to balance optimism with tempered warnings about near-term economic challenges.
“There is a period of transition, because what we’re doing is very big,” Trump said Sunday on Fox News’ “Sunday Morning Futures.”
“We’re bringing wealth back to America. That’s a big thing. … It takes a little time, but I think it should be great for us.”
When asked if he expected a recession, Trump avoided making a direct prediction.
“I hate to predict things like that,” he said, though he acknowledged that “we’re going to have disruption, but we’re OK with that.”
His comments follow growing concerns among economists over slowing labor markets, tariff uncertainty and early indicators suggesting negative growth in the first quarter.
Tesla’s stock tumbled more than 10% midday, dragging down the broader market.
Gina Bolvin, president of Boston-based Bolvin Wealth Management Group, said that the market volatility is likely to continue.
“This is a headline driven market — one that could change in an hour,” Bolvin said, adding that investors should be in it for the long haul.
“Sit tight. Buckle up. We finally have the correction we were waiting for, and long-term investors will be rewarded again,” Bolvin said.
Shares of the so-called Magnificent Seven — Apple, Microsoft, Alphabet, Amazon, Nvidia, and Meta — also suffered, falling more than 2.5%.
The selloff in these major players contributed to the broader slump, as investors reassessed their positions in high-growth stocks.
The bond market reflected a similar cautious tone, with the yield on the 10-year U.S. Treasury slipping to 4.22% — down from 4.31% at Friday’s close.
The WSJ Dollar Index also hovered near its lowest level since early November, reflecting broader uncertainty in global markets.
Market turbulence comes amid the administration’s effort to prepare Americans for a potential economic slowdown, one that officials insist will ultimately lead to stronger growth.
Analysts at major banks have adjusted their outlooks accordingly.
JPMorgan Chase economists raised their estimate of a recession occurring this year to 40%, up from 30% at the start of the year.
“We see a material risk that the US falls into recession this year owing to extreme US policies,” wrote a team led by Bruce Kasman.
Goldman Sachs also adjusted its forecast, increasing the recession probability to 20%, citing the administration’s commitment to policies that could exacerbate economic downturns.
Morgan Stanley economists, meanwhile, lowered their growth projections for 2025 and 2026 while raising inflation expectations.
Despite the market downturn, Trump has downplayed Wall Street’s role as a measure of success.
“What I have to do is build a strong country,” he said. “You can’t really watch the stock market.”
The turmoil in US markets echoed overseas, with European and Asian stocks experiencing volatility.