Markets took a nosedive on Monday as renewed concerns over President Trump’s aggressive trade tactics weighed heavily on investors’ confidence.
On Sunday, Trump announced his intention to roll out sweeping reciprocal tariffs on all nations, a move that clashed with the more targeted policy hinted at by White House officials just days earlier.
“You’d start with all countries,” Trump told reporters aboard Air Force One late Sunday — though he added that the tariffs would be more generous than trade partners had been to the US.
David Bahnsen, chief investment officer at the Manhattan-based Bahnsen Group, which manages $7.1 billion in assets, explained the market’s downturn: “Stocks are moving lower on the uncertainty over tariffs, and the realization that the April 2 ‘Liberation Day’ may not provide more clarity on the administration’s tariff strategy,” he told The NY Post.
He added, “The uncertainty over the tariff policy is more of a problem for markets than the tariffs themselves.”
The tech-heavy Nasdaq Composite bore the brunt of Monday’s losses, plunging over 2% and reaching a six-month low.
However, by 1:20 p.m. Eastern Time, the index had slightly recovered, down roughly 211 points or 1.2%.
At the bell, the S&P 500 fell more than 1%, dropping 60 points to its lowest level since September. Meanwhile, the Dow Jones Industrial Average showed a milder dip of 0.4%.
As the session wore on, the Dow managed to reverse course, gaining over 100 points. The S&P also clawed back some losses and was down 0.4% by early afternoon.
With Trump’s major tariff announcement slated for April 2 — a date he has labeled “Liberation Day” — markets appear set to end March on a grim note.
The looming threat of a trade war and deteriorating economic sentiment prompted Goldman Sachs to hike its recession forecast over the next year to 35%, up from a previous estimate of 20%.
Goldman also adjusted its outlook to reflect greater inflationary pressures and now expects the Federal Reserve to cut interest rates three times in 2025. The bank also downgraded its GDP growth projection to just 1% for the year and anticipates unemployment will hit 4.5% by year-end.
Additionally, the firm increased its inflation forecast to 3.5%, using the annual rise in the core personal consumption expenditures (PCE) price index — a preferred gauge for the Fed — as its benchmark.
JPMorgan economists offered a similarly grim outlook earlier this month, putting recession odds at 40%.
Technology stocks were among the hardest hit during Monday’s rout.
Nvidia, the leading semiconductor company in AI hardware, saw its shares drop by over 5% during morning trading. Tesla — which had soared past $430 per share following the Nov. 5 election — also sank more than 5%.
By 10:30 a.m. Eastern Time, Tesla shares were down to about $246 — marking a steep fall of over 40% from their mid-December peak.
Meta Platforms and Amazon weren’t spared either, each seeing declines north of 3% amid escalating trade tensions.
As equity markets wobbled, investors poured money into safer bets like gold.
That flight to safety sent gold prices soaring past the $3,100 mark for the first time, reaching around $3,147 as demand surged for low-risk assets.
Both the Nasdaq and S&P 500 have now posted losses in five of the past six weeks.
Wall Street remains on high alert, carefully analyzing new data releases for signs of economic weakness.
Recent anxiety was fueled by stronger-than-expected readings in core PCE inflation, a key metric closely followed by the Fed.
“Stock markets are generally adverse to tariffs because most of their tax burden falls on the domestic economy, contrary to the White House’s claims,” Dr. Phillip Magness, senior fellow at the libertarian-leaning Independent Institute told The Post.
“But those same markets especially abhor uncertainty, including tariff uncertainty that affects international supply chains and raw material costs on goods such as steel and aluminum.”
Magness pointed out that Trump’s “chaotic approach to imposing tariffs has produced the see-saw effect that we’ve seen on Wall Street for the last two months, particularly as the president has vacillated between conflicting tariff threats with self-contradictory rationales” such as protecting favored industries to increasing tax revenue yields.
With all eyes on the economy, investors are now awaiting key data drops — including Friday’s March jobs report — along with figures on private sector hiring and job vacancies.
Market watchers hope these updates will shed light on the underlying health and trajectory of the U.S. economy.
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