NEW YORK (AP) 鈥� The U.S. stock market's is cutting deeper Monday, and it's flirting with its worst day in years as Wall Street questions how much President Donald Trump endure through tariffs and other policies in order to get what he wants.
The S&P 500 was down 3% in late trading, which would be its sharpest drop since the highest inflation in generations was shredding budgets in 2022. The Dow Jones Industrial Average was down 956 points, or 2.2%, with a little more than a half-hour remaining in trading, and the Nasdaq composite was 4.3% lower.
The main measure of the U.S. stock market is on track for a of more than 1%, up or down, in the last eight days following a dominated by Trump鈥檚 -and- -again . The worry is that the whipsaw moves on tariffs will either hurt the economy directly or create enough uncertainty to drive U.S. companies and consumers into an economy-freezing paralysis. The S&P 500 is down roughly 9% from its set on Feb. 19.
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's 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�
"There 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.
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 5.9% Monday to bring its loss for the year so far to 21%. It鈥檚 a steep drop-off from its nearly 820% surge over 2023 and 2024.
Elon Musk's Tesla fell 15.1% to deepen its loss for 2025 to nearly 45%. After on hopes that Musk's close relationship with Trump would help the electric-vehicle company, the stock has since 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 tumbled sharply. United Airlines lost 8.4%, and cruise-ship operator Carnival fell 9.2%.
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 $79,000 from more than $106,000 in December.
Instead, investors have been bidding 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 4.21% 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's a major move for the bond market.
All the uncertainty, though, hasn't shut down dealmaking on Wall Street. Redfin's stock jumped 64.7% 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 17.2%.
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.
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 and Elaine Kurtenbach contributed.
Stan Choe, The Associated Press
