US stocks plunge as Dow drops 1,000 points amid economic uncertainty

The US stock market experienced a sharp selloff on Monday with Wall Street facing one of its worst days in years as mounting economic concerns and uncertainty over President Donald Trumps trade policies weighed heavily on investor confidenceThe SampP 500 dropped 3237 in afternoon trading setting it up for its steepest decline since 2022 when soaring inflation severely strained household budgets The Dow Jones Industrial Average plummeted by 1042 points or 2437 with just over an hour left in the trading session Meanwhile the Nasdaq composite tumbled 4637 reflecting a particularly rough day for tech stocksAccording to AP the SampP 500 is now down 9137 from its record high set on February 19 The marketrsquos latest drop comes amid heightened volatility with the index swinging by more than 137 mdash either up or down mdash in seven of the past eight sessions The turbulence stems largely from Trumprsquos inconsistent tariff policies which have left businesses and investors uncertain about the future The fear is that these sharp market fluctuations could either directly weaken the economy or trigger enough uncertainty to stall corporate investment and consumer spendingSigns of economic fragility are already emerging Surveys have shown increased pessimism among businesses and consumers and realtime indicators compiled by the Federal Reserve Bank of Atlanta suggest that the US economy may already be contractingWhen asked over the weekend if he anticipated a recession in 2025 Trump told Fox News I hate to predict things like that There is a period of transition because what were doing is very big Were bringing wealth back to America Thats a big thing It takes a little time It takes a little timeTrump has justified his tariff strategy as a means of encouraging the return of manufacturing jobs to the US Treasury Secretary Scott Bessent acknowledged that the economy might go through a detox phase as it adjusts to less governmentdriven spendingDespite the market turmoil the US job market remains stable for now and the economy ended last year on solid footing However economists are scaling back their growth projections for 2025 David Mericle of Goldman Sachs recently lowered his forecast for US economic growth to 1737 from 2237 citing largerthanexpected tariffs as the key factor He also increased the probability of a recession over the next year to oneinfive noting that the White House retains the option to ease policy changes if economic risks become more pronouncedThere are always multiple forces at work in the market but right now almost all of them are taking a back seat to tariffs said Chris Larkin managing director for trading and investing at ETrade from Morgan StanleyBig Tech stocks which have powered much of the marketrsquos recent strength took some of the hardest hits Nvidia sank 5937 bringing its total loss for the year to 2137 This marks a stark reversal from its meteoric rise of nearly 82037 over 2023 and 2024Tesla plunged 15137 on Monday deepening its yeartodate decline to nearly 4537 While the stock initially surged after Trumprsquos reelection on hopes that Elon Muskrsquos close ties with the administration would benefit the electric vehicle maker it has since fallen sharply amid growing concerns over the brandrsquos political and public image Protests over US government job cuts and other policy moves have even targeted Tesla dealershipsConsumerdriven stocks also stumbled United Airlines fell 8437 while Carnival the cruise ship operator lost 9237Other asset classes also reflected investor unease Bitcoinrsquos value slid below 78000 after peaking at over 106000 in December reflecting broader caution in the marketTreasury bonds on the other hand saw increased demand as investors sought safer assets The yield on the 10year Treasury fell to 42137 from 43237 on Friday continuing a downward trend from Januaryrsquos high of nearly 48037 Lower yields reflect rising demand for bonds as investors brace for further economic uncertaintyDespite the turmoil dealmaking on Wall Street remains active Shares of Redfin soared 64737 after Rocket Companies announced plans to acquire the digital real estate brokerage in an allstock deal valued at 175 billion Rocketrsquos stock however fell 17237 following the announcementServiceNow fell 7937 after the AI platform company revealed plans to acquire AIassistant maker Moveworks for 285 billion in cash and stockEuropean markets also suffered with major indexes falling after a mixed session in Asia Hong Kongrsquos market declined 1837 while Shanghai slipped 0237 following data showing that Chinarsquos consumer prices fell in February for the first time in 13 months pointing to weakness in the worldrsquos secondlargest economyAs per AP reports the early timing of the Lunar New Year holiday added to the downward pressure on Chinarsquos economyInvestors remain on edge as markets grapple with the uncertain fallout from Trumprsquos trade policies and broader economic headwinds The coming months are likely to remain volatile as Wall Street adjusts to shifting economic and political realitiesWith inputs from AP