US stocks are tumbling like nine-pins with some of the front-line large cap stocks falling over 5% on Monday.
Megacap stocks, such as Apple (-5.5%), Microsoft (-3.5%), Nvidia (-5.3%), Amazon (-3.5%), and Meta (-5.5%), all had a poor start to the week. After data revealed a 49% decline in China shipments in February, Tesla also fell by 8.3%.
US markets are in deep red with the S&P 500 losing 2%, the Dow Jones dropping 355 points, and the Nasdaq falling roughly 2%, extending last week’s losses as fears about the US growth picture grew.
Recent jobs data indicated a softening labor market, and Fed Chair Powell recognized growing economic uncertainty last week.
In a Fox News interview, President Trump declined to rule out a recession as a result of his administration’s tariff policy changes, calling the present economic phase as a “period of transition”.
“The US stock market is heading towards a potential correction, after outpacing the rest of the world for the past year,” says Nigel Green, CEO of global financial advisory giant, deVere Group.
“The warning signs are stacking up. Consumer sentiment is slipping, inflation remains persistent, and initial jobless claims are climbing. The Atlanta Federal Reserve’s closely watched GDPNow model is already pointing to economic contraction in the first quarter of 2025,” adds Green.
US markets are falling on recessionary fears and related uncertainty around tariffs. Trump’s tariff policies, which have seen the US impose heavy tariffs on trading partners, have sparked fears and have been criticized for their unpredictable nature.
Trump’s stance on tariffs is causing market anxiety and posing concerns that policy uncertainty could lead to a recession in the U.S. economy. The Trump administration is expected to implement measures against major US trade partners from April 1, 2025 in the form of reciprocal tariffs.
The market turmoil is primarily impacting the Magnificent Seven stocks of Big Tech companies. The next big event is on March 12, Wednesday, when the US CPI data for February will be released. The FOMC meeting on March 18-19 becomes crucial for the global markets where the likelihood for the Fed to go for a rate cut increases.