Traders work on the floor of the New York Stock Exchange on March 7, 2025.
Spencer Platt | Getty Images
A three-week market sell-off intensified on Monday, with investors worried that tariff policy uncertainty would tip the economy into a recession, something President Donald Trump did not rule out over the weekend in an interview.
The Dow Jones Industrial Average dropped 805 points, or 1.9%. The S&P 500 shed 2.6%. The tech-heavy Nasdaq Composite saw the biggest selling of the major averages, falling 4%.
The S&P 500 is off by 9.1% from its all-time high reached Feb. 19, the Nasdaq Composite is off by 14% from its recent high. Small-cap benchmark Russell 2000 is off 18% from its high. A 10% decline is considered a correction on Wall Street.
The losses worsened as the trading day continued.
The “Magnificent Seven” cohort — once the stars of this bull market — led the declines Monday as investors dumped the group for perceived safer plays. Tesla tumbled 13%, heading for its worst day since 2020, while Alphabet, Meta and AI darling Nvidia lost around 5%. Palantir, another once-loved stock by retail traders, was down more than 10%.
Nasdaq Composite, 1-day
Worries have been increasing about the economy in the last month, sparked initially by some soft data that appeared to be in reaction to the tariff policy back-and-forth and then fueled further by some recent comments by the White House.
Treasury Secretary Scott Bessent on Friday told CNBC that there could be a “detox period” for the economy as the new administration cuts government spending. Then in an interview that aired Sunday, Trump responded to a question on Fox News about the possibility of a recession by saying the economy was going through “a period of transition.”
“What I have to do is build a strong country,” Trump said. “You can’t really watch the stock market.”
Goldman Sachs slashed its economic growth forecast in recent days because of the potential tariff impact.
“We are in the throes of a manufactured correction,” said Sam Stovall, chief investment strategist at CFRA Research. “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.”
Signs of investors taking off risk were evident everywhere on Wall Street. The Cboe Volatility index, a measure of trader fear, jumped to the highest since December. Bitcoin tumbled back below $80,000 and Treasury yields declined.
The declines in the S&P 500 would have been worse were it not for a rotation into some more defensive areas of the market that have steady revenue and pay a dividend. Procter & Gamble and Johnson & Johnson both added 1%.
