Stock Market Comeback Erased: S&P 500 Sinks To 6-Month Low As Trump Says Don’t ‘Watch The Stock Market’

The stock market selloff stretched into a new week, with the latest losses heagain tied to comments from President Donald Trump, whose wide-sweeping and oft-changing tariff policies have rattled Wall Street confidence, as early fears of a recession emerge.

Traders work the floor of the New York Stock Exchange last week.

AFP via Getty Images

Key Facts

All three major U.S. stock indexes fell significantly Monday, erasing Friday afternoon’s comeback.

The Dow Jones Industrial Average dropped 2.1%, or 890 points, while the S&P 500 declined 2.7% and the Nasdaq Composite sank 4%.

The benchmark S&P and the Nasdaq closed at their lowest respective levels since mid September, while the Dow ended at its lowest price since September.

Monday was be the Nasdaq’s worst daily decline since September 2022.

Driving Monday’s pullback was Trump’s interview with Fox News’ “Sunday Morning Futures” released Sunday, during which Trump declined to rule out a recession, warned of a period of economic “transition” and cautioned “you can’t really watch the stock market.”

Trump’s comments are “weighing on sentiment” and “did nothing to ease investor concerns about ongoing policy chaos,” Sevens Report founder Tom Essaye wrote in a Monday note to clients.

Nasdaq Dips Into Correction

Trump may say to heed little attention to near-term stock moves, but the losses are staggering. The Nasdaq is in correction territory, declining 13% from its closing price on Feb. 19, when the market took a sharply negative turn. The S&P is down 9% during that period, while the Dow is down 6%, or 2,700 points. The S&P is fresh off of its worst week since September, declining 3.1% last week.

Big Tech Leads Monday Losses

Big Tech stocks are the most notable individual losers during the brutal three-week stretch, namely artificial intelligence chip architect Nvidia and electric vehicle maker Tesla, led by Trump administration official Elon Musk. Shares of Nvidia dipped 5% on Monday, extended its loss dating back to Feb. 19 to 23%, and shares of Tesla fell 14%, pushing its loss dating back to Feb. 19 to 37%. Also sinking Monday were shares of Apple, Google parent Alphabet and Facebook parent Meta, as each Silicon Valley giant sank about 5% as investors fled to safety.

Big Number

20%. That’s about how much the “magnificent seven” group of big American tech companies — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — is collectively down from its December record, according to Bloomberg.

Why Stocks Are Falling

The recent decline coincided with Trump’s implementation of tariffs, which are largely a bad thing for stocks as they can hurt corporate profit margins and soften consumer demand. But even beyond any negative direct effects of tariffs, markets have responded negatively to Trump’s frequent waffling on when the duties will go into effect, as well as what goods. “The reason stocks are dropping is the spike in uncertainty and fear that uncertainty will lead to a whole host of negatives,” explained Essaye. To that end, the new fear of the U.S. entering a recession has become a topic of conversation. Goldman Sachs economists increased their recession forecast Friday, calling for 20% odds of a significant downturn over the next 12 months, up from 15%, citing trade policies.

Contra

Morgan Stanley strategists led by Michael Wilson maintained their 6,500 price target for the S&P by the end of 2025, calling for a 16% gain from Monday’s roughly 5,610. Trump’s policies will be “sequenced in a more growth-negative way to start the year before” lower interest rates and friendlier corporate policies “benefit the market later in the year,” said Wilson.

Crucial Quote

“This is a headline driven market, one that could change in an hour. Sit tight. Buckle up,” Gina Bolvin, president of Bolvin Wealth Management Group, wrote in emailed comments.

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