...
By Gabe Whisnant and Sonam Sheth
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
The U.S. stock market's decline deepened on Monday, with the S&P 500 sliding 2.7 percent as concerns grew over how much economic strain President Donald Trump's tariff policy and trade war will impose on Americans.
Why It Matters
Monday's continued sell-off came one day after Trump refused to rule out the possibility of a recession resulting from the U.S.'s trade war with Canada, Mexico and China.
Read More on U.S.
What To Know
The Dow Jones Industrial Average dropped 2.1 percent, while the Nasdaq Composite took the heaviest hit, plunging 4 percent in its worst day since 2022.
On Sunday, Trump said the U.S. is going through a transitional period with respect to his trade policy.
When Fox News' Maria Bartiromo asked Trump on Sunday whether "rising worries" about his back-and-forth on tariffs could lead to a slowdown," the president responded: "I hate to predict things like that. There is a period of transition, because what we're doing is very big."
...
"We're bringing wealth back to America," he said. "That's a big thing. And there are always periods of it takes a little time. I think it should be great for us."
The president also acknowledged that the U.S. will experience some volatility as a result of his policies, telling Bartiromo the country is "going to have a disruption, but we're okay with that."
U.S. and global markets have been rocked since Trump followed through on his threat last week to impose steep tariffs on Mexico and Canada and increase tariffs on China.
He reversed course shortly after as stocks took a hit and Canada and China immediately responded with reciprocal tariffs.
Trump said most goods covered by the USMCA trade agreement, which he negotiated during his first term as a replacement for NAFTA, would be granted temporary reprieve through April 2. He also exempted automakers from his tariffs after leading car companies warned of the economic consequences and requested a carveout.
On Monday, as the Wall Street sell-off continued, Canada hit New York, Michigan and Minnesota with an additional 25 percent surcharge for electricity. That came after Ontario Premier Doug Ford threatened last Monday to block energy exports to the U.S. "with a smile" if Trump's tariffs went into effect.
Electricity is the fourth largest energy commodity traded between Canada and the U.S., after crude oil, natural gas and petroleum.
Ford, who has consistently criticized Trump's tariff policy, told NewsNation Now on Monday that he wants to avoid "a self-inflicted recession because of Donald Trump's, or should I say, President Trump's tariffs."
"It's unacceptable," he added.
Tesla Gets Throttled
Tesla, owned by billionaire and Department of Government Efficiency head Elon Musk, was among the hardest-hit stocks on Monday, along with airlines and other consumer-driven companies that rely on confident U.S. shoppers.
Tesla's stock fell by 15 percent, losing $16 billion in one day and becoming the worst-performing stock in the S&P 500 this year.
Meanwhile, Bitcoin continued its sharp decline, falling below $79,000 after trading above $100,000 in December.
Earlier Monday, analysts at Goldman Sachs downgraded their forecast for economic growth in the U.S. from 2.4 percent to 1.7 percent, citing tariff-related concerns.
"Our trade policy assumptions have become considerably more adverse," Goldman Sachs chief economist Jan Hatzius said in a note on Monday.
Hatzius added that "the recent moves might well have further to go."
What People Are Saying
The White House said in a statement: "Since President Trump was elected, industry leaders have responded to President Trump's America First economic agenda of tariffs, deregulation, and the unleashing of American energy with trillions in investment commitments that will create thousands of new jobs. President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term."
White House National Economic Council director Kevin Hassett told CNBC earlier Monday: "There are a lot of reasons to be extremely bullish about the economy going forward. But for sure, this quarter, there are some blips in the data. What's going to happen is the first quarter is going to squeak into the positive category, and then the second quarter is going to take off as everybody sees the reality of the tax cuts."
Musk shrugged off Tesla's loss, quoting Monty Python in a Fox Business interview: "But look on the bright side! Always look on the bright side of life!"
What Happens Next
Economic turbulence in U.S. and global markets will likely continue as Trump doubles down on his threat to impose tariffs and its trading partners levy their own tariffs in retaliation.
Reporting by The Associated Press contributed to this article.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines