U.S. stocks plunged on Monday, suffering widespread losses amid an escalating trade war a day after President Donald Trump declined to rule out the possibility of a recession.
The Dow Jones Industrial Average closed down 890 points, or 2%, while the S&P 500 declined 2.7%. The tech-heavy Nasdaq plummeted 4%, which amounted to more than $1 trillion in losses, according to Bloomberg.
Tesla, the electric carmaker led by Elon Musk, sank 15%. United Airlines and Delta each fell more than 4%.
The selloff coincided with retaliatory tariffs against the U.S. following levies last week on Canada, Mexico and China, some of which were delayed.
On Monday, China started imposing tariffs on U.S. imports such as chicken, wheat and soybeans. Ontario Premier Doug Ford said his province would slap a 25% surcharge on electricity bound for homes and businesses in New York, Minnesota and Michigan.
“President Trump’s tariffs are a disaster for the U.S. economy,” Ford said. “Until the threat of tariffs is gone for good, Ontario won’t back down.”
The market drawdown on Monday extended losses last week. The S&P 500 recorded its worst week since September.
When asked about a potential recession in an interview broadcast on Sunday, Trump said tariffs imposed in recent days could bring about a “period of transition.”
“I hate to predict things like that,” Trump told Fox News in an interview taped on Thursday. “It takes a little time, but I think it should be great for us.”
In response to a question later on Sunday about his reluctance to rule out a recession, Trump said: “I tell you what, of course you hesitate. Who knows?”
Since Inauguration Day, the Dow Jones Industrial Average has fallen 2.5%. The S&P 500 has dropped 5% over that period, while the Nasdaq has plummeted 10%.
The market slowdown has coincided with some worse-than-expected overall economic performance.
A jobs report on Friday showed U.S. employers hired 151,000 workers last month, falling short of the expected 170,000 jobs added.
In February, a key gauge of consumer confidence registered its largest monthly drop since August 2021, the nonpartisan Conference Board said last month. The share of consumers who expect a recession within the next year surged to a nine-month high, the data showed.
Still, some measures of consumer sentiment improved. Consumers’ assessment of current business conditions moved higher, while an uptick in purchasing plans for a home extended a monthslong recovery.
Mortgage rates also have dropped for seven consecutive weeks, FreddieMac data showed. The average rate for a 30-year fixed mortgage stands at 6.63%, its lowest level since December.
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