S&P 500, Nasdaq post worst day since 2022 amid recession fears; Dow drops 890 points
U.S. stocks plunged, with the tech-heavy Nasdaq and broad S&P 500 posting their biggest one-day drop since September 2022, amid heightened risk of recession this year after President Donald Trump wouldn't rule one out.
In a Fox News interview on Sunday, Trump declined to predict whether the U.S. could face a recession.
"I hate to predict things like that," he told Fox host Maria Bartiromo. "There is a period of transition because what we’re doing is very big."
The S&P 500 and Nasdaq each dropped to their lowest levels since September 2024, with the Nasdaq falling deeper into correction territory. Correction territory is at least 10% below a record high, which for the Nasdaq was on December 19.
The S&P 500 fell 2.70%, or 155.64 points, to 5,614.56 after posting its worst week since September last week. The blue-chip Dow dropped 2.08%, or 890.01 points, to 41,911.71 and the Nasdaq shed 4%, or 727.90 points, to 17,468.32. The benchmark 10-year Treasury yield slipped to 4.225%.
Trump's comments echoed remarks from Treasury Secretary Scott Bessent on Friday on CNBC that there could be a “detox period” for the economy as the new administration cuts government spending. They come at a time when investors are concerned that his fluctuating trade policies on Mexico, Canada and China could dampen consumer demand and corporate investment.
“Companies around the world are increasingly taking a 'wait-and-see' approach to hiring and investment plans amid a range of uncertainties surrounding geopolitics and global trade," said Andrew Harker, economics drector at S&P Global Market Intelligence. "Projections for employment, capital expenditure and R&D (research and development) investment were all scaled back in February relative to the position in October last year, revealing a belt-tightening approach to survival in uncertain times."
China's retaliatory tariffs on some U.S. imports also take effect on Monday and U.S. tariffs on some base metals are expected to take effect later in the week.
"There are always multiple forces at work in the market, but right now, almost all of them are taking a back seat to tariffs," said Chris Larkin, managing director, trading and investing, at E*TRADE from Morgan Stanley.
Although the stock decline has felt fast and intense, "it's important to put these events into perspective," Principal Asset Management said in a note. "While markets tend to respond swiftly, the economic effects of tariffs typically emerge gradually."
A heavy week of economic data could cloud the outlook further. Inflation and consumer sentiment data are due this week.
“Amid the general mood of anxiety on U.S. equity markets, this week’s inflation news could contribute to how long the selloff continues," said BeiChen Lin, senior investment strategist at Russell Investments. "If inflation were to come in somewhat softer than expected, it could potentially help investors breathe a sigh of relief and stabilize equity markets in the near-term. But if inflation were to come in hotter than anticipated, that could spook markets.”
Corporate news
- DoorDash and Williams-Sonoma will join the S&P 500 on March 24. Shares of the food-delivery service were fractionally lower and the kitchen retailer fell 1.67%.
- Robinhood agreed to pay nearly $30 million to settle an investigation, the Financial Industry Regulatory Authority said. Shares of the online trading platform fell 19.79%.
- DexCom received a warnings letter from the Food and Drug Administration following inspections at its San Diego and Mesa, Arizona, facilities. Shares of the diabetes device maker slid 9.15%.
- Tesla shares continued to drop, down 15.43%. Brokerage UBS lowered its forecast for the EV automaker's first-quarter deliveries and cut its price target on the stock.
Cryptocurrency
Bitcoin prices continue to whipsaw, last down 2.31% at $78,945.61, below the key psychological $80,000 level, as investors sold off riskier assets in this tumultuous time.
Despite a string of what most would see as good news for the cryptocurrency market – such as Trump's strategic reserve, more interest from large investing firms and signs of looser regulation – bitcoin remains at the mercy of uncertainty in the overall market, analysts said.
The story was updated with new information.
Medora Lee is a money, markets, and personal finance reporter at Paste BN. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.