NEW YORK (AP) 鈥� The U.S. stock market鈥檚 cut deeper on Monday as Wall Street questioned how much President Donald Trump endure through tariffs and other policies in order to get what he wants.
The S&P 500 dropped 2.7% to drag it close to 9% below its , which was set just last month. At one point, the S&P 500 was down 3.6% and on track for its worst day since 2022. That鈥檚 when the highest inflation in generations was shredding budgets and raising worries about a possible recession that ultimately never came.
The Dow Jones Industrial Average dropped 890 points, or 2.1%, after paring an earlier loss of more than 1,100, while the Nasdaq composite skidded by 4%.
It was the worst day yet in a where the S&P 500 has swung more than 1%, up or down, in eight days because of Trump鈥檚 -and- -again . The worry is that the whipsaw moves will either hurt the economy directly or create enough uncertainty to drive U.S. companies and consumers into an economy-freezing paralysis.
The economy has already given some signals of weakening, mostly through . And a widely followed collection of real-time suggests the U.S. economy may already be shrinking.
Asked over the weekend whether he was expecting a recession in 2025, : 鈥淚 hate to predict things like that. There is a period of transition because what we鈥檙e doing is very big. We鈥檙e bringing wealth back to America. That鈥檚 a big thing.鈥� He then added, 鈥淚t takes a little time. It takes a little time.鈥�
Trump says he wants to bring manufacturing jobs back to the United States, among other reasons he鈥檚 given for tariffs. His Treasury secretary, Scott Bessent, has also said the economy may go through a 鈥渄etox鈥� period as it weans off an addiction to spending by the government. The White House is trying to limit federal spending, while also cutting the federal workforce and , which could hinder the job market.
The U.S. job market is still showing at the moment, to be sure, and the economy ended last year . But economists are marking down their forecasts for how the economy will perform this year.
At Goldman Sachs, for example, David Mericle cut his estimate for U.S. economic growth to 1.7% from 2.2% for the end of 2025 over the year before, largely because tariffs look like they鈥檒l be bigger than he was previously forecasting.
He sees a one-in-five chance of a recession over the next year, raising it only slightly because 鈥渢he White House has the option to pull back policy changes鈥� if the risks to the economy 鈥渂egin to look more serious.鈥�
鈥淭here are always multiple forces at work in the market, but right now, almost all of them are taking a back seat to tariffs,鈥� according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
In response to the market sell-off, White House spokesman Kush Desai noted that a number of companies have responded to Trump's 鈥淎merica First鈥� economic agenda with 鈥渢rillions in investment commitments that will create thousands of jobs.鈥�
Trump met on Monday with tech industry CEOs, but the event was closed to the news media.
The worries hitting Wall Street have so far been hurting some of its biggest stars the most. Big Tech stocks and companies that rode the frenzy in recent years have slumped sharply.
fell another 5.1% Monday to bring its loss for the year so far to more than 20%. It鈥檚 a steep drop-off from its nearly 820% surge over 2023 and 2024.
Elon Musk鈥檚 Tesla fell 15.4% to deepen its loss for 2025 to 45%. After on hopes that Musk鈥檚 close relationship with Trump would help the electric-vehicle company, the stock has slumped on with Musk. Protests against and other moves have targeted Tesla dealerships, for example.
Stocks of companies that depend on U.S. households feeling good enough about their finances to spend also fell sharply. Cruise-ship operator Carnival dropped 7.6%, and United Airlines lost 6.3%.
It鈥檚 not just stocks struggling. Investors are sending prices lower for all kinds of investments whose momentum had earlier seemed nearly impossible to stop at times, such as bitcoin. The cryptocurrency鈥檚 value has dropped below $80,000 from more than $106,000 in December.
Instead, investors have bid up U.S. Treasury bonds as they look for things whose prices can hold up better when the economy is under pressure. That has sent prices for Treasurys sharply higher, which in turn has sent down their yields.
The yield on the 10-year Treasury tumbled again to 4.22% from 4.32% late Friday. It鈥檚 been dropping since January, when it was approaching 4.80%, as worries about the economy have grown. That鈥檚 a major move for the bond market.
All the uncertainty, though, hasn鈥檛 shut down dealmaking on Wall Street. Redfin鈥檚 stock jumped 67.9% after Rocket said it would buy the digital real estate brokerage in an all-stock deal valuing it at $1.75 billion. Rocket鈥檚 stock sank 15.3%.
ServiceNow fell 7.9% after the AI platform company said it was buying AI-assistant maker Moveworks for $2.85 billion in cash and stock.
All told, the S&P 500 fell 155.64 points to 5,614.56. The Dow Jones Industrial Average dropped 890.01 to 41,911.71, and the Nasdaq composite sank 727.90 to 17,468.32.
In stock markets abroad, European indexes largely fell following a mixed session in Asia.
Indexes fell 1.8% in Hong Kong and 0.2% in Shanghai after China said fell in February for the first time in 13 months. It鈥檚 the latest signal of weakness for the world鈥檚 second-largest economy, as persistent weak demand was compounded by the early timing of the Lunar New Year holiday.
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AP Business Writers Matt Ott, Elaine Kurtenbach and Josh Boak contributed.
Stan Choe, The Associated Press
