Wall Street Slumps as Recession Fears Take Hold

Recession concerns deepened as escalating trade tensions between the US, China, and Canada triggered a notable selloff on Wall Street. 

The Nasdaq plunged 4% on Monday, its largest single-day loss since 2022, erasing $1.1 trillion in market value. The S&P 500 slid 2.7% to a six-month low, while the Dow Jones dropped 900 points, or 2.08%, wiping out gains made since Trump’s election victory.

Tech stocks bore the brunt of the decline. Tesla was hit hardest, tumbling 15% after news that its EV sales plummeted 71% in Germany and 44% in France over the first two months of the year. 

Delays in autonomous driving approval in China, tied to US trade tensions, compounded the pressure. UBS downgraded Tesla’s outlook for 2025 deliveries, citing weaker demand and rising costs from tariffs.

Other major tech names, including Nvidia, Apple, Microsoft, Alphabet, Meta, and Amazon, all fell between 2% and 5%. The S&P 500’s tech sector sank over 4%, driven by growing fears that higher tariffs will erode profit margins and weaken global demand.

What Does This Mean for Me?

Trump acknowledged that the US economy is facing a “period of transition” but downplayed the potential damage from tariffs, suggesting that any market disruption would be temporary. 

Despite this, bond markets are pricing in a rate cut as early as June. The 2-year Treasury yield fell 13 basis points to 3.86%, its lowest level since October 2024, reflecting expectations of weaker growth and potential Fed intervention.