US shares drop sharply after Trump refuses to rule out recession
Tesla shares plunged by at least 15% to $222 – meaning it has lost more than half its value since its peak at $479.86 on 17 December. But Elon Musk said on X that “it will be fine long-term”.
The tech-heavy Nasdaq Composite closed down more than 4% on Monday while the S&P 500 slumped about 2.7% – its biggest daily percentage drop since 18 December.
The CBOE Volatility Index, often dubbed Wall Street’s “fear gauge,” surged over 3.6 points to hit 27, marking its highest level since 18 December.
Airlines and other companies that need US shoppers feeling confident enough to spend also saw sharp losses. Bitcoin fell below $79,000 from more than $100,000 in December, with richly valued US tech stocks bearing the brunt of the recent sell-off on Wall Street.
Financial markets have been volatile in recent weeks as rising trade tensions – with tariffs of up to 25% against goods from Canada and Mexico – and signs of slowing US economic growth weighed on consumer confidence and business activity.
China has also been targeted with tariffs and the European Union could be next, from 2 April, when Mr Trump has promised to ramp up his “America first” ambitions.
China’s retaliatory tariffs on select US imports are set to take effect on Monday, with US tariffs on certain base metals anticipated later in the week.
Asked directly in a Fox News interview on Sunday whether he was expecting a recession, Mr Trump did not deny the possibility.
He said: “I hate to predict things like that. There is a period of transition because what we’re doing is very big, we’re bringing wealth back to America. That’s a big thing. And there are always periods of – it takes a little time. It takes a little time.”
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