US
VN
TW
Investing.com-- The S&P 500 slumped Monday, as concerns that President Donald Trump’s tariff policies could tip the U.S. economic into recession soured investor sentiment.
At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average lost 889 points, or 2.1%, the S&P 500 index fell 2.8%, and the NASDAQ Composite dropped 4%.
Trump declines to rule out recession
Sentiment was hit further after President Trump didn’t rule out the possibility of a U.S. recession this year and flagged short-term economic turbulence from his trade and fiscal agenda in a Sunday Morning Futures interview on Fox News.
When asked about the possibility of a recession, Trump said he did not wish to make predictions, stating that there was a “period of transition because what we’re doing is very big.”
Trump imposed 25% tariffs on Mexico and Canada last week, but later exempted most of the goods for a month, creating uncertainty around his trade policies.
The U.S. president also increased tariffs on Chinese goods, which prompted retaliatory levies from China. He is set to implement worldwide reciprocal tariffs from April 2, which could further erode market sentiment.
Elsewhere, markets were assessing the outcome of a leadership election in Canada’s ruling Liberal Party. Former central banker Mark Carney won 86% of the vote to succeed Justin Trudeau as the country’s Prime Minister, topping ex-finance minister Chrystia Freeland.
Carney hit out at Trump in an address following the ballot, saying he is "attacking Canadian workers, families and businesses."
Key inflation report looms large
The main economic release this week will be the all-important consumer price index for February, which is due to provide an updated glimpse into the path of U.S. inflation.
Wednesday’s report will encompass the first full month of Trump’s administration since he returned to the White House in late January. Prices grew at the fastest path since August 2023 in the opening month of 2025.
Economists anticipate that the headline figure cooled to 2.9% from 3.0% in the twelve months to February. Month-on-month, it is seen easing marginally to 0.3% from 0.5%.
The number will be among the last the Federal Reserve receives before its next policy gathering on March 18-19. The central bank pushed pause on an easing cycle at its last
A slew of other crucial economic indicators are also set to be released this week, including the all-important consumer price index and the Job Openings and Labor Turnover Survey, a key proxy of labor demand.
This follow’s Friday’s official monthly jobs report, which showed that the U.S. economy added 151,000 jobs in February, slightly below expectations, and the unemployment rate edged up to 4.1%.
Big Tech leads stumble
But tech including semiconductor giants like NVIDIA Corporation (NASDAQ:NVDA) and Broadcom Inc (NASDAQ:AVGO) led the move lower in the broader market amid concerns about enterprise spending as recession fears gather steam.
The downside momentum in tech comes ahead of a raft of quarterly earnings from key companies this week, including Oracle (NYSE:ORCL).
The results will come after Trump said the company, in conjunction with ChatGPT-maker OpenAI and Japan’s SoftBank (TYO:9984), would make a sizeable investment into artificial intelligence infrastructure.
Tesla Inc (NASDAQ:TSLA), meanwhile, slumped more than 15% adding to recent losses that saw the EV maker more than wipe out its post-election gains.
Other tech sector earnings will come from Adobe (NASDAQ:ADBE) and DocuSign (NASDAQ:DOCU), while retailers Dick’s Sporting Goods (F:DKS) and Kohl’s (NYSE:KSS) could also offer some insight into the state of the U.S. consumer.
In other news, Novo Nordisk (NYSE:NVO) A/S Class B (CSE:NOVOb) fell about 10% after the pharma company reported disappointing results from its weight loss drug trail.
(Peter Nurse, Ayushman Ojha contributed to his article.)
