The stock market kicked off the week with steep losses Monday after President Trump declined Sunday to rule out the U.S. economy slowing into recession.
The Dow Jones Industrial Average closed with a loss of 890 points Monday, falling 2.1 percent. The Nasdaq composite closed with a loss of 4 percent, and the S&P 500 index closed down 2.7 percent.
Stocks have fallen steadily since the start of March in response to a string of underwhelming economic data and whipsaw tariff announcements from the Trump administration. But the selloff intensified Monday after Trump demurred on his outlook for the U.S. economy in a Sunday interview.
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“I hate to predict things like that,” Trump told Fox Business host Maria Bartiromo on “Sunday Morning Futures” when asked if he expected a recession this year.
“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. But I think it should be great for us. I mean, I think it should be great.”
All three major indexes are now below their levels on Nov. 5, 2024, — the day of Trump’s reelection, which set off a major stock market rally — though briefly recovered from steeper losses before the opening bell. The Nasdaq was down as much a 4.5 percent on the day before climbing slightly higher.
Wall Street has become increasingly fearful of a recession after public and private-sector job data, consumer confidence surveys and inflation readings showed the economy backtracking from progress made during the end of the Biden administration.
Trump has also rattled markets and business leaders with constantly shifting tariffs on Mexican, Canadian and Chinese products. The president last week subjected all Mexican and Canadian goods to 25 percent tariffs, but later exempted imports that comply with the U.S-Mexico-Canada Agreement (USMCA), the NAFTA rewrite struck during Trump’s first term.
Trump also threatened to impose additional tariffs on Canadian lumber and dairy, and has reiterated plans to levy reciprocal import taxes to mirror tariffs placed by other countries on U.S. products.
While the Mexican government has held off on retaliation, the Canadian federal government and several provincial leaders have imposed tariffs or U.S. goods, new fees on Canadian energy exports and removed some American products from shelves.
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The government of Ontario is applying a 25 percent surcharge starting Monday on electricity exports to three U.S. states in response to U.S. tariffs on Canada.
This surcharge will affect electricity sales for 1.5 million homes and businesses across Michigan, Minnesota and New York, the Ontario government said. In total, it could cost up to $400,000 per day.
Trump’s trade war has spurred deep concern among economists and even some members of his party about the potential impact of higher costs and fewer exports on the U.S. economy.
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National Economic Council Director Kevin Hassett sought to tamp down on concerns Monday, arguing the “first quarter is going to squeak into the positive category,” even as anxieties around the economy rise nationwide.
“[I’d] just be very wary, Joe, of conversations about recession or not, given that we had two negative quarters, that used to be a recession under Biden, and then that wasn’t a recession,” Hassett told CNBC’s Joe Kernen on “Squawk Box.”
“I think that what’s going to happen is the first quarter is going to squeak into the positive category, and then the second quarter is going to take off as everybody sees the reality of the tax cuts,” he added.
Updated at 4:10 p.m. EDT.
