On Monday morning, the three major U.S. stock indexes experienced a significant decline, driven by investor concerns over President Donald Trump's tariffs on key trading partners and his reluctance to rule out a potential recession. The Dow Jones Industrial Average fell more than 1%, while the broader S&P 500 dropped 2 percentage points, and the tech-heavy Nasdaq lost over 3 percentage points. This downturn follows a challenging week for the S&P 500, which saw its largest weekly drop in six months. The index is now down 7.4% from its peak in February. Investors remain uncertain about the future of trade policies, particularly after Trump imposed new tariffs on Mexican and Canadian exports, only to pause them temporarily. Meanwhile, the sell-off in big-tech stocks continued, with companies like Tesla, Apple, and Microsoft seeing substantial losses.

The recent volatility in the market can be traced back to the ongoing uncertainty surrounding the U.S.'s trade relationships. Last week, President Trump introduced new tariffs on imports from Mexico and Canada, setting a 25% duty on certain goods. However, just days later, he decided to suspend these tariffs until early April, leaving many wondering what will happen next. This unpredictability has left investors on edge, especially as the U.S. economy shows signs of weakening. Consumer confidence, which plays a crucial role in economic performance, has been waning, and real-time indicators suggest that the country's GDP may already be contracting. The Federal Reserve Bank of Atlanta's latest data paints a concerning picture, indicating that the world's largest economy might be facing tough times ahead.

In addition to trade tensions, comments from key figures have added to the market's unease. While Commerce Secretary Howard Lutnick confidently stated that there would be no recession, President Trump was more cautious in his remarks. In an interview with Fox News, he acknowledged that the country is undergoing a period of transition as it implements new policies aimed at bringing wealth back to America. However, he also admitted that this process takes time and could lead to short-term instability. Analysts are closely watching these developments, with some adjusting their forecasts accordingly. For instance, Goldman Sachs' David Mericle lowered his growth estimate for 2025 from 2.2% to 1.7%, citing the potential impact of larger-than-expected tariffs.

The technology sector, a cornerstone of the U.S. economy, has not been spared from the sell-off. Shares of prominent tech companies such as Tesla, Apple, Microsoft, and others have all seen notable declines. Tesla, in particular, suffered a sharp drop of more than 8%, raising questions about the company's future prospects. As the market continues to react to these uncertainties, investors are bracing for further volatility in the coming weeks. The combination of trade policy shifts and economic indicators pointing to a slowdown has created a challenging environment for businesses and consumers alike.