Stocks tank as Trump declines to dismiss recession risk

Major stock indexes tanked Monday, continuing a sell-off that gathered steam last week as rattled investors began zeroing in on the prospect of a significant fall-off in U.S. growth amid persistent inflation and a wobbling job market.

The broadest index of stocks, the S&P 500, was down as much as 2.1% Monday. Not only has it now given up all of President Donald Trump’s post-election gains, it is now at its lowest level since September and is essentially unchanged over the past seven months.

The tech-heavy Nasdaq was off 3.4% as it plunged deeper into “correction” territory. The Dow Jones Industrial Average dropped nearly 500 points, or 1.2%.

Recession fears were heightened this weekend after Trump declined to say that there wouldn’t be one. In an interview with Fox News that aired Sunday, Trump responded to a question about the possibility of a recession by saying the economy was going through “a period of transition.”

Few major firms were spared from Monday’s draw down. Nvidia, which has led markets higher over the past couple of years amid the AI investment boom, was down more than 4%, and is now off 22% year to date. Other major losers included Apple, Microsoft, and Tesla, which was down more than 10%. The electric vehicle maker has also given up all its post-election gains as CEO Elon Musk has become a ubiquitous presence in Trump’s White House.

Even before debates about how protests against Musk and Tesla have impacted shares, flagging sales in Europe and especially China, Tesla’s most important market, were already taking a bite out of the company’s value. Those anti-Musk protest have largely been in response to the tech billionaire’s leadership of Trump’s Department of Government Efficiency.

Crypto, too, was hit Monday, with bitcoin prices falling below $80,000 for the first time since Trump’s election and despite the White House convening the first-ever crypto summit Friday after announcing the creation of “strategic bitcoin reserve” — though some investors were left disappointed by the details.

Shares in Coinbase, the U.S.’s largest crypto exchange, fell 10% Monday and has likewise erased its post-election gains.

Investors are up in arms about Trump’s seemingly chaotic economic policy. The president has repeatedly started, then stopped the imposition of tariffs on America’s largest trading partners, while he and Musk have implemented drastic cuts to the federal workforce that threaten to swamp an already shaky jobs market with additional workers.

“We are in the throes of a manufactured correction,” said Sam Stovall, chief investment strategist at CFRA Research, told CNBC. “I say manufactured because it’s really based in response to the new administration’s tariff programs, or at least threats of tariffs, and what kind of an impact that will have on the economy.”

At the same time, Stovall said, many traders may simply be locking in gains or taking profits from markets that had reached all-time highs under the Biden administration.

“Right now we’re going through a typical pullback and probably will experience a mild correction before all is completed, which actually would be good for the resetting of the dials of this ongoing bull market,” he said.