Stocks tumbled on Monday, dragging the S&P 500 back into correction territory as investors grew increasingly anxious about President Trump’s escalating tariff proposals. The S&P 500 slipped 1%, while the Nasdaq Composite saw a sharper decline of 2%. The Dow Jones Industrial Average, however, managed a modest gain of 61 points, or 0.1%. Leading the market downturn were tech giants Nvidia and Meta Platforms, which dropped 5% and 2%, respectively. Tesla also plunged 6%, reflecting the continued struggles of tech stocks following last year’s AI-fueled rally. Nvidia, now trading 31% below its 52-week high, has become a symbol of the sector’s broader retreat. The S&P 500 remains more than 10% below its February peak, hitting its lowest level since September, while the Nasdaq has also fallen to its weakest point since September, sitting 16% below its December all-time high.
Market jitters are being fueled by Trump’s upcoming tariffs, including a 25% tax on foreign-made cars, which are set to take effect Wednesday, a day the president has dubbed “Liberation Day.” Trump is also expected to unveil reciprocal tariffs targeting nations that impose duties on U.S. exports. Over the weekend, concerns deepened as reports surfaced that Trump had pushed his advisors to adopt even more stringent tariff measures. In a Sunday interview with NBC, Trump dismissed fears that the tariffs would lead to higher car prices, further adding to the uncertainty. The week’s steep market declines have erased the brief recovery seen in March, which had followed an initial bout of investor unease over Trump’s trade policies. The selling pressure from February has only intensified as the April 2 reciprocal tariff deadline approaches.
Trump doubled down on his trade policies over the weekend, reaffirming his commitment to the 25% car tariff, which he plans to maintain into a potential second term. He also issued a stern warning that reciprocal tariffs would target all nations, not just those with significant trade imbalances. The escalating trade disputes have cast a shadow over economic forecasts, with CNBC’s latest survey predicting first-quarter growth at a mere 0.3%, a significant drop from the 2.3% growth recorded in the final quarter of last year. As trade tensions rise, analysts fear that the economic outlook may continue to darken, further weighing on investor sentiment.
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