US Stock Market's Sell-Off Continues Amid Uncertainty Over Trump's Policies

The US stock market has been experiencing a sell-off for several days now, with the S&P 500 dropping 2.7% on Monday to reach close to 9% below its all-time high set just last month. The Dow Jones Industrial Average also dropped 890 points, or 2.1%, after paring an earlier loss of more than 1,100, while the Nasdaq composite skidded by 4%. This sell-off is largely attributed to the uncertainty surrounding President Donald Trump's policies and tariffs, which are causing whipsaw moves in the market.

The worry is that the uncertainty caused by Trump's tariffs will either hurt the economy directly or create enough uncertainty to drive US companies and consumers into an economy-freezing paralysis. The economy has already shown signs of weakening, with surveys indicating increased pessimism among businesses and consumers. Additionally, a widely followed collection of real-time indicators compiled by the Federal Reserve Bank of Atlanta suggests that the US economy may already be shrinking.

Economists Mark Down Forecasts for Economic Growth

Economists are marking down their forecasts for how the economy will perform this year in light of the uncertainty caused by Trump's policies. At Goldman Sachs, David Mericle cut his estimate for US economic growth to 1.7% from 2.2% for the end of 2025 over the year before, largely because tariffs look like they'll 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 "the White House has the option to pull back policy changes" if the risks to the economy "begin to look more serious."

Tariffs Take Center Stage in Market Volatility

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 artificial-intelligence frenzy in recent years have slumped sharply. Nvidia fell another 5.1% on Monday to bring its loss for the year so far to more than 20%. It's a steep drop-off from its nearly 820% surge over 2023 and 2024.

Elon Musk's Tesla also fell 15.4% on Monday to deepen its loss for 2025 to 45%. The stock had slumped on worries that its brand has become intertwined with Musk, who has been involved in various controversies recently. Protests against the U.S. government's efforts to cull its workforce and other moves have targeted Tesla dealerships.

Investors Flock to Safe-Haven Investments

It's 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's value has dropped below $80,000 from more than $106,000 in December.

Instead, investors have bid up US 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's been dropping since January, when it was approaching 4.80%, as worries about the economy have grown.

Deal-Making Continues Despite Market Uncertainty

All the uncertainty, though, hasn't shut down deal-making on Wall Street. Redfin's 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's 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.

Global Markets Follow US Lead

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 consumer prices fell in February for the first time in 13 months. It's the latest signal of weakness for the world's second-largest economy, as persistent weak demand was compounded by the early timing of the Lunar New Year holiday.

Conclusion

The uncertainty surrounding Trump's policies and tariffs continues to plague the US stock market, causing a sell-off that has been ongoing for several days now. Economists are marking down their forecasts for economic growth, and investors are sending prices lower for all kinds of investments whose momentum had earlier seemed nearly impossible to stop at times. Despite the uncertainty, deal-making on Wall Street continues, with companies like Redfin and ServiceNow announcing major deals. As the market continues to navigate this uncertain landscape, it remains to be seen what impact Trump's policies will have on the economy in the long run.