U.S. Markets Plunge as Trump Dismisses Economic Fears Amid Tariff Uncertainty
U.S. stock markets took a significant hit on Monday, as investors grew increasingly concerned about a potential recession. The S&P 500 dropped by 2.7%, while the Dow Jones lost 2.08%, and the Nasdaq Composite sank by 4%, marking its worst session since September 2022. Despite this sharp downturn, the Trump administration downplayed the severity of the slump, with White House officials claiming the market drop was not as “meaningful” as the ongoing business activity. Meanwhile, markets in Asia-Pacific also retreated, with Japan’s Nikkei 225 declining by 1% after weak GDP data.
President Donald Trump dismissed concerns from businesses regarding his administration’s tariffs, which have caused significant uncertainty for U.S. companies. During a Fox News interview, Trump asserted that businesses had “plenty of clarity” about the tariffs, despite ongoing calls for more stability in trade policies. He acknowledged the potential for disruption but dismissed any immediate fears of a recession, stating that the economy would ultimately remain intact.
Amid these developments, the Chinese government made efforts to stimulate its economy, doubling subsidies for consumer trade-in programs to 300 billion yuan in an attempt to boost domestic consumption. In a related move, Chinese investors have been actively purchasing stocks, with net mainland Chinese purchases of Hong Kong stocks reaching a record high. This contrasts with the uncertain outlook in the U.S. as global markets continue to grapple with volatile conditions.
Meanwhile, automakers like Volkswagen and Stellantis received temporary relief from Trump’s 25% tariffs on vehicles made in North America, while BMW faces continued levies. Tesla also suffered significant losses, with shares dropping more than 15%—its worst day since September 2020—following a seven-week losing streak. Additionally, Elon Musk’s social media platform, X, experienced several outages, adding to the mounting pressure on his businesses. Despite these setbacks, economists believe a U.S. recession is not imminent, citing resilience in the labor market and consumer spending.
SOURCE: CNBC