Markets slide amid recession fears, Trump tariffs

What happened

U.S. stock markets had their worst day of 2025 Monday, with the Dow Jones Industrial Average closing down 890 points, or 2.1%. The S&P 500 shed 2.7% — 8.6% and more than $4 trillion in market value lower than a month ago — while the Nasdaq tumbled 4%, notching its worst day since 2022.

Who said what

Monday's stock plunge extended a "miserable month for markets" that saw all three major market indexes "wipe out" any gains made since November's election, said CNN. Wall Street is starting to question "how much pain President Donald Trump will let the economy endure through tariffs and other policies in order to get what he wants," The Associated Press said. In an interview broadcast Sunday, Trump declined to rule out a coming recession.

Investors and economists are digesting Trump's apparent "indifference to rising risks" from his "double-barreled blitz" of slashing the federal workforce and threatening "huge tariffs" on America's "largest trading partners," The Wall Street Journal said. After years of policymakers being "singularly focused on achieving a so-called soft landing," Trump's teams are "considering a course correction that, by their own acknowledgment, might tip the economy toward a hard landing."

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In one measure of the fallout, the five tech executives who stood behind Trump during his inauguration have since collectively lost $209 billion in wealth, Bloomberg said, with Tesla's Elon Musk alone losing $145 billion. Tesla's stock plummeted 15.4% yesterday to its lowest level since October. Analysts attributed the losses to declining sales, "protests of Musk's political activity, including his mass firings of U.S. government workers" as head of Trump's DOGE team, and concerns that "politics are distracting the world's richest man from tending to his cash cow," Reuters said.

White House National Economic Council Director Kevin Hassett told CNBC Monday there were "a lot of reasons to be extremely bullish about the economy," despite "some blips in the data" this quarter. Hassett's comments did not "immediately convince" investors, "increasingly skittish" about Trump's unpredictable tariff decisions, The Washington Post said. The Cboe Volatility Index, or "Wall Street's 'fear gauge,'" surged 19.5% by market close.

What next?

Trump's 25% tariffs on steel and aluminum imports are set to take effect Wednesday, the same day the government releases its monthly inflation report.