• Stock market plunges as recession fears grow; S&P 500 drops 2.7%, Nasdaq falls 4%.
  • Tech giants like Tesla, Meta, and Nvidia lead the sell-off, with significant losses.
  • Economists warn of economic slowdown fueled by tariff instability and shifting policies.

The stock market faced another intense sell-off Monday, as fears of a potential recession gripped investors. Concerns over ongoing tariff policy instability have left Wall Street on edge, with major indexes taking a nosedive. Many are questioning whether the current administration’s trade policies are steering the economy into rocky waters.

Major Stock Indexes Take a Hit

The S&P 500 dropped 2.7%, hitting its lowest point since September before closing at 5,614.56. The Nasdaq Composite, known for its tech focus, had the sharpest decline among major averages, plunging 4% to 17,468.32—its worst performance since September 2022. Meanwhile, the Dow Jones Industrial Average shed 890.01 points, or 2.08%, ending at 41,911.71.

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These drops mark significant losses for the market. The S&P 500 is now 8.7% below its record high from February, while the Nasdaq has fallen nearly 14%. On Wall Street, a 10% downturn is typically considered a market correction, and investors are feeling jittery.

What Triggered the Sell-Off?

The sell-off worsened throughout the day as traders ditched high-risk stocks for safer investments. The once-dominant “Magnificent Seven” tech giants led the decline. Tesla tumbled 15%, its worst day since 2020, while Meta and Alphabet fell more than 4%. AI leader Nvidia dropped 5%, and Palantir fell a staggering 10%. The shift comes as worries about the economy have intensified over the past month.

Adding fuel to the fire, President Donald Trump (Donald Trump) recently described the economy as being in a “period of transition.” Speaking on Fox News, President Trump emphasized his focus on building a strong nation, dismissing fears tied to daily market fluctuations.

Economists are voicing concerns too. Goldman Sachs has cut its economic growth forecast, citing the potential fallout from trade tariffs. Treasury Secretary Scott Bessent warned last Friday of a possible “detox period” as government spending is reeled in.

Defensive Investments Offer Relief

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Despite the turbulence, defensive stocks like Mondelez and Johnson & Johnson managed to eke out small gains. These companies, known for their reliable revenue and dividends, offered some stability to investors looking to minimize risk. Meanwhile, the Cboe Volatility Index surged, signaling heightened fear in the markets.

What’s Next for Wall Street?

This market correction, described by some as “manufactured” due to the administration’s tariff policies, is raising questions about the future of U.S. economic growth. As uncertainty looms, investors are urged to reassess their strategies and prepare for potential challenges ahead.

 

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